TXN Long Horns - Exit

Sent the following Tweet 13:48 ET

"Dumped $TXN #TXN due to a Kicker candlestick formation. Details later."

The top chart was captured at 13:46 ET and the bottom chart was captured at 16:00 ET. The patterns are almost identical, except the red candle body at the Close was worse than mid-afternoon, thus validating the decision to exit the trade earlier in the day.

Also, notice on the bottom chart there is no top wick. Both the Open and the High for the day are both 188.32. This means the day session opened gapped down and dropped from there. Zero strength. This led to a gap, and combined with yesterday's candle, a Kicker candlestick pattern was formed.

Unfortunately, we have a very Bearish looking chart, and there was no choice whether to get out of this trade. In fact, if price continues down tomorrow, we should probably short it. If I do, I may not comment on it on the blog. 

I only post on a fraction of the trades I take. Most of my trades are intraday, and I'm too busy trading to blog about it. Plus, I want to focus on swing trades on the blog so I can document trades as they happen day by day. I use the same indicators and strategies on the swing trades as I do on intraday trades.

I would expect TXN to meander down to the downward angled Trend Line, then bounce off and continue higher. But who knows. Anything can happen from here.

Summary:

Entered TXN Jun 190/195 Call Spread on 5/24/21 for $1.97

Exit 6/3/21 for $1.30

Loss .67 * 100 shares = -$67.00

TXN Long Horns - Update 4

We formed a Bullish Harami candlestick pattern using today's and yesterday's candles. We also closed near the top of today's trading range, and above all the Moving Averages, which is bullish. 

Another possibly bullish setup is that candles have been creeping along in a relatively tight range as the 8ema climbed to meet them. Today's low touched and bounced off the 8ema. This kind of price action often precedes a pop to the upside. Although, the channel made by the candles is usually more horizontal, where this is at a 45 degree angle. The diagonal channel may be a bullish sign, but its very rare in my experience, and frankly I'm not sure if its bullish, bearish, or irrelevant.

On the other hand, see how the red Stochastics line is slightly dipping downward while price is still climbing? That could be the beginning of a Negative Stochastics Divergence. If so, that would be bearish. But its too early to tell.

I'd say the bullish indications outweigh any bearish indications, at least at the moment. Certainly no good reason to close the position.

TXN Long Horns - Update 3

We gapped up at the Open, which is Bullish, but then we dropped and engulfed, then closed below the low of, Friday's Doji candle. And we did this on high Stochastics and decent volume. This is Bearish.

However, we closed on the 3ema and above the 8ema, as well as every other Moving Average. This shows relative strength. Since we're not stretched far from the 8ema (in fact we came very close to touching it today), the decision was to hold the position.

TXN Long Horns - Update 2

Past 3 days were all Doji candles, which isn't very bullish, but each one opened higher, closed higher, had higher highs, and higher lows, which is bullish. Also notice the Bollinger Bands are blossoming, which suggests continued movement to the upside. And we're still closing above the 3ema.

Stochastics are very overbought but don't see a good reason to exit yet. So, steady as she goes.

TXN Long Horns - Update 1

We could have closed with a more bullish chart, but certainly not ready to bail on this trade yet. We closed with a Doji candle which represents indecision. But we closed right on the 3ema, which shows continued strength.

However, we closed with a lower low and a lower close than yesterday. We also have very overbought Stochastics (14,3,3 K%=88). These hint at possible weakness on the way.

A common possibility from here is a roll over down to the Trend Line we broke out of, for a re-test of the TL as support. If that happens and we bounce off the TL and climb from there, that's actually a very strong bullish pattern. However, we could crash back down through the TL and keep going. So, if we close below the 8ema, and there's significantly more distance to the TL, we'd probably want to exit, take a small loss, and wait to see if we bounce and close back over the 8ema. At which point we can re-enter a long position.

For now, we held our long position.