9/26 Wednesday – Entered Bearish @ $29.78

Got triggered bearish this morning.  The best thing about this trade is that, we are possible having Island Reversal there.

It’s not totally confirmed yet because if that break-away gap is filled today or tomorrow then it wasn’t a Island Reversal (Exhaustion gap followed by break-away gap).  Island reversal is very significant reversal pattern.

My stop is just above yesterday’s candle upper wick.

Target is at round $37 which have been served as solid pivot area in the past.

Indicators are fully supporting this Island Reversal play.  All of them rolling over.

Forgot About the Uptrend Support

First of all, I’ve made pretty big mistake on my last analysis.   I forgot to place uptrend support line.  I had it drawn one earlier chart, I just never extended.. however nothing to panic yet because it seems like we have a Island Reversal on our hand.  (It’s funny because I’ve been seeing lot of those this week)

Island Reversal pattern is probably one of the most strong reversal candle pattern because of the formation.

You gap up with exhaustion gap and then the stock reverses and gaps down thus forming a island up top.  very very strong reversal signal.

So my target is still at $27.20 but I will be keeping eye on that uptrend support line. If it throws any reversal signs near that support, I will be tightening my stop.  Good bearish volume activity last two days as well.

10/1 Monday – Island Reversal No Longer Valid

Well stop is still at the same place.

The gap was filled like 4 trading days ago so the Island Reversal claim is no longer valid.

However it looks still bearish without that. It would’ve been so much stronger but still works.

Currently testing that gap support  as new resistance at $30. We did try to break that today but still hanging around just below that resistance area.

Pretty neutral at this point.  We will need more data to confirm anything.

10/5 Friday – Bearish Stair-Step Continuation

-Looks like we are forming a bearish stair-step continuation and it has been supported by the declining volume.  In any trend, you will see resting patterns. And stair-step is one of the resting/consolidating pattern. And these patterns are usually supported/confirmed by diverging volume.

So I am thinking this is going to break bearish however my biggest concern is uptrend support line from 6/22/12.

That uptrend support has been respected by $MRO for about 4 months! I mean it is very very strong uptrend support line because it touche 5 times last 4 months and bounced every time.

So I am guessing  it might break-out bearish and then it will hit that support and bounce upside.  That’s not going to be good for me.  However we don’t have any sort of bullish reversal in the chart pattern so I will worry about it later.

-Well it’s little early to tell but you can see that we are seeing some contraction on Bollinger Bands.   Last two times that it occurred, $MRO broke out very strongly so this might be interesting however here is the concern.  Which way will it break?

-Technically BBands could break on either side. Bearish or bullish.  However if you look at the last two times when it broke out, it broke out in the direction of the trend.  So the question is which direction are we trending on $MRO?

-Well if you look at last 4-5 months, technically we are still in bullish trend however if you look at last month, we are starting to find some bearish trend… so which way???

I DO NOT KNOW.  LOL  so this is going to be very very fun to see but at the same time it could be ugly.

10/8 Monday – Bulls are not dead yet

I want you to pay attention to RSI oscillator.  Stock has been slowly trading downside and looks like it’s going to roll over however RSI never rolled over yet.  That same support that has been held this whole 3 months bullish move is still holding. This very important indication to me that bullish sentiment is lingering around.

You have probably noticed that stock has been hard time rolling over.. Just hanging around on that top level.

Stoch is almost at overbought territory and MACD is getting into zero line but the stock has really gone no where.

I’ve tightened my stop looking at the RSI indicator and that uptrend support from 6/22. Because we are losing bearish momentum.  Also BBands are squeezing and $MRO tends to break out well in these squeezes so I don’t want to risk too much.  Will see how it plays this coming week.

10/15 Monday – Not Looking Good for Bears

Well not good for me (bears).  Right at our uptrend support, we threw a Morning Star reversal and Bullish Tower reversal. You know why this is more significant now? Because morning star reversal and the bullish tower didn’t happen three days ago. It happened today at a STRONG support.

This was bad trade to began with. If you look at my first update, I’ve never drew that uptrend line in so I got in bearish prematurely not knowing what is about to come.   I also made another mistake by not getting out at least 50-70% of my bearish positions last Friday when we had bearish day. Because I knew we were in consolidation period which it could break on either side but I thought because we had bearish day we might break bearish.

Two costly mistakes but lesson learned.

Tomorrow I will probably get stopped out with a loss.  >_<   bad bad trade in my part.

10/16 Tuesday – My Last Hope

(9:19am CT)

Well we have this downtrend resistance (in red) I’ve drawn here.  It has been served as pretty strong resistance last several occasions so I am hoping it could slow down this bullish momentum we’ve been building since yesterday.  If we can close with a Doji or spinning top today, it will help.  We gaped up this morning so looks pretty strong thus far.  So I might get stopped out but one last draw for me.

Switching to Bullish Side on Open Tomorrow

(After Close)

Ok well it was bad trade and I lost some money however looking at my bollinger bands, it looks like it is about to have bollinger break out. So I have my leg order set tomorrow.  If this thing continues bullish tomorrow morning, I will be stop out of my bearish trade and automatically enter into bullish trade to ride this bollinger bands squeeze play.

10/17 Monday – Bollinger Band Break-Out

(9:52am CT)

Got triggered with calls at open.  Hopefully I can gain some of my lost back from my ugly puts before.

Currently running into resistance of $31.29 from early September.  I want to hold on until later today and see if it’s going to push through the resistance otherwise I probably close it out pretty quickly here. Already had three days of bullish days and I can’t help to think that we are going to see some pull back tomorrow.

(12:18pm CT)

Well closed out just now.  Three days of bullishness.  I think we got more room to go but before we do its going to want to retrace or pull back. So I got out. I already had a loss from my initial bearish trade and this quick bullish trade helped. I was so blind and one sided with my bearish position. I didn’t even see the Triangle consolidation which then I would’ve gotten out of my bearish trade like several days ago and gotten in bullish yesterday. If i would’ve done that, I would’ve made more money.

It’s funny how blind you can be sometimes with your positions.  That’s what happened here.  I didn’t really look at my bullish side (I really didn’t want to) because I was so focusing on my bearish argument.  That’s not a good analyst.

Anyway.  Lesson learned and move forward.