MCP Update

Wednesday I believe, I opened a speculative size MCP long, because it was in front of earnings, here is the post, MCP Update/ Possible Trade and this is the previous update MCP Follow Up / Trade Set up.

MCP's earnings didn't go well, but this reminds me of the RIMM trade in which it was just before earnings, there were a number of very strong 3C charts and we took the trade, earnings flopped or the stock did any way, but the 3C signals remained strong. I'll have to dig up the posts from that trade, but I believe we were down 15+%, maybe more, but the signals remained strong. I think it was about 2-3 weeks later that the twin CEOs of RIMM stepped down in a major shake-up and RIMM shot up, we ended up closing the trade at a gain of somewhere in the mid-teens, even after having been down so much.

We weren't seeing an earnings leak, we were seeing accumulation though, just for a different reason, a major board room shakeup and the 3C signals told us the entire time, "Something favorable is going on and that's what gave us the objective evidence to stay in the position.

In any case, here are the charts for MCP,I said earlier that we needed to see it start moving laterally, that's where we'll see accumulation and there's more than enough volume,

 This is a bearish triangle within a larger base in MCP, there was a breakout and we were long with about a 6% gain when I didn't like the way it looked (no 3C confirmation) , but worst of all, this asset after basing for over a year was not likely to move to a stage 2 breakout without putting in a head fake move first, so we exited the long at a small gain at the first yellow box and I have been looking for a head fake move BELOW the triangle ever since to get long again.

While this is an earnings inspired move (head fake or not) so was RIMM's, as long as the charts look decent still.



This is a wider view of the larger base and the triangle, the problem was there had not been a shakeout of the base, the move of the last 2-days certainly qualifies as a shakeout, creating supply is what it's all about to be accumulated in size and on the cheap by smart money.

 I said earlier, "we need to see some lateral/sideways movement", that is just starting to form now, this is where we'll see if the divergences go wild or not.

So far the early 1 min is starting to accumulate, this is just a start.

The 3 min is in a positive position which is surprising, unless it was a really bad move in which 3C moved to a lower low, I suspect this is being accumulated along the lines of a shakeout of the major base above.

And the 5 min chart, there's plenty of supplly, that's what a head fake move creates, whether a true head fake or not, there's plenty of supply.

Whether this works out for my partial position  or not, I think for a new trade at some point this is going to be a nice entry, just from a market maker stand point, rather specialist, they need to unload the inventory they've taken on at higher prices.

And the 10 min chart, it's not the long relative positive divegrence that I like, but the small leading positive of the last day or so.

And the 15 min in that nest of supply.

So I'll continue to hold MCP until or unless the signals give me a reason not to.

Finally on a long term basis like the large stage 1 base, this mullti-day 3C chart, highest probabilities went from in line on the downtrend to accumulation/leading positive at the base, a head fake move usually occurs or a shakeout, just before a transition to the next stage which would be 2, up. So I'm going to stick around, "Maybe" even add if the charts give me reason.