Intraday Trade TAP 03/16/2009
Intraday Trade TAP was a profitable short selling trade from today. TAP is the stock ticker symbol for Molson Coors Brewing Company.
After I finished this short selling trade today, I had to think how I came across this particular stock so I could write about this trade right from the start with how I selected the stock.
I came across this stock over the weekend while I was browsing some of the Market Club Smart Scan results for stocks hitting 52 week lows. I did this over the weekend because I wanted to find stocks that were performing badly while the market rallied last week.
This would provide me with stocks that were not participating in the weeklong rally and would possibly provide additional short selling opportunities, even if the market continued higher this week.
Once I took a further look into the chart, I found that the stock had been declining consistently since 2009 started.
At the beginning of the year TAP was near $60.00 and was currently trading near $32.00 with no signs of any buying interest at all.
The stock closed Friday at $31.68. It had opened higher today and instead of mover up with the rest of the market as the morning went on, TAP started to move lower.
When I checked how it was doing, it was just before 11 a.m. and TAP was trading near the previous days closing price, as the major market Indices were at the highs of the morning.
I looked at a 2-3 day chart and noticed that on Friday there was a spike lower towards the end of the day down to $31.13 and decided to place an order to short at $31.65 with a price target of $31.25. This would provide me with a short term trading profit of about 1% give or take depending on where I got filled, after commissions. This also would allow for a possible move towards Friday's low of $31.13 without having to reach it fully.
I watched the trade as time went by and as the stock moved lower in my favor, I had an order to cover my position ready to enter. Initially I was ready to take a loss at $31.75 because if I was wrong in trying to catch a re-test of Friday's low, I wanted to accept that and get out. There are always other trading opportunities.
As the price moved lower, I adjusted my order to cover my position to breakeven and then let the price determine what I did next. As 12:00 noon approached, the stock started to drop towards Friday's low and knowing that moves are sometimes exaggerated at noon due to it being lunch time, I covered my position at $31.25 at 11:59 a.m.
Here is another chart from Market Club that gave a "Short Selling" signal for TAP 2 weeks ago for people who Swing Trade. This stock has been in Distribution mode since the beginning of the year. No real volatility, just a steady decline.