PCLN

OK, back to PCLN, this is a trade that I'm kind of excited about, just because it's been pumped up so much that traders have probably fallen in love with it. Which is kind of a neat thing to watch when margin calls come in, I'd bet that a good portion of them would meet the calls with cash AND, if PCLN kept falling and broke the level that I mentioned in the TRADE IDEA eventually we'd see a whole herd trying to squeeze through the gate at once. This is the kind of set up that sees an equity take a full fledged swan dive and the trade becomes very profitable very quickly, even though it' already at a profit.

Considering they had blowout earnings last night and it was trading at $550 in AH, today's $519.70 and volume is on the right track. Last night on their message boards, the long and strong crowd was talking about a $700 price target based on earnings.

 Here's PCLN breaking that support level on heavy volume, but don't take a victory lap just quite yet. This is a perfect place, being a bunch of traders have been shaken out, for PCLN to stage a "Hope Rally". Note that the break is there, but it's not a decisive break, just enough to hit a ton of stops.

 Here's the longer term picture in terms of the cycle and Wall Street's M.O., we get distribution which takes PCLN down a bit, it's under accumulation at lower prices and breaks out to new highs. Since then, distribution again, it fits the Wall Street reversal M.O. pretty well thus far. However, as I said, watch for the HOPE RALLY.

This 60 min trend channel has held on a closing basis and it's what I'd think to be the most appropriate stop. If you got in on the trade when it was put out, even if you're stopped out here, you're at a profit and can still take another swing at it.

I liked the trade because of the risk:reward ratio, I still like it for the same reasons.