Did Someone Follow the ORCL Short Trade Idea?

ORCL was a short trade idea from the end of March (this link is a search for ORCL and as you'll see there were numerous updates on the trade at the end of March). This trade idea started in the middle of March, I haven't been able to read all the updates, but the March 22nd looks like a good one as it shows the March 20th post, what we were looking for to happen to enter and then 1 day later we got exactly what we wanted-LET THE TRADE COME TO YOU!

 This is the area where we wanted to see the trade move to so we could enter a short position on strength, but also a head fake move and where the trade is now. However, the trade has a lot more potential than this.

 On a weekly chart there's a preceding uptrend and then a large right angle triangle. Triangle's this big (see BIDU) are almost never consolidations and almost always either tops or bottoms depending on the preceding trend, with a preceding uptrend this would be considered a top. The price pattern implied target is around $14 or about half of where price is now.

 During March we were looking for signs of this counter trend flag-like rally to give us an entry signal. On March 20th in an update I wrote about the level of resistance at the yellow trendline specifically saying,

"ORCL is lingering at last support, so again, at important technical levels, the breaks are never as clean in the real world as they are in the T.A. books and seminars.

The 2 day Trend Channel does a good job in holding ORCL's moves, however, if they run a shakeout and this is just experience and gut, I have no evidence, then near the Trend Channel stop out (on a closing basis), there is a very juicy looking level of resistance, a break through that (at the yellow trendline) would almost certainly shakeout shorts. This is why I prefer wide stops on initial positions, it would be a shame to get booted from a good short on a shakeout move. Just be aware of the area and remember psychology, the market is about fear and greed, the more powerful a shakeout or head fake move, the more it moves emotions which for too many traders dictate decisions." 


This is an excellent head fake move, you can clearly see it was so obvious that it was predicted the day before. What made it obvious? First the flag-like uptrend had to end, second ORCL was starting to move toward breaking the channel, third the area of resistance was so well defined that traders in ORCL wold have set orders and stops there making it almost certain it would be hit. Remember when you place any kind of limit or stop order with your broker, everyone on Wall Street can see it, that is why I use market orders to execute the trade right away without giving Wall Street a head's up of my intensions, it may not matter in a big stock like ORCL, but in smaller stocks it does and when short term trading it does. The main point is so many traders using these orders would have made the area very obvious and an easy target for Wall St. to shakeout and trigger orders that would later be at a loss.

 We already knew that Money Stream had confirmed the distribution in the top pattern so entering the trade and managing it were all that were left to do.

 On the 30 min 3C chart every attempt to rally was distributed, the yellow box is that head fake move above.

 The 5 min chart shows the head fake move clearly, it's the price area sticking straight up, again, all price strength has been sold in to.

 Here's the most recent decline in ORCL on a clear negative divergence, there's also a relative positive divergence so if you missed the trade, it may come back to you allowing you to enter or add to it on some price strength.

Since ORCL is still technically in the top, it is very volatile, I would use at least this 5 day Trend Channel as a stop and maybe even give it some extra room. The bottom line is I wouldn't want to get stopped out of an excellent looking long term trade because I too too many shares with too tight of a stop. You can always add as the trade moves in your favor. For those of you who haven't already read my article from Trade-Guild.net (my free site), check this one out: How to Make More Than 100% in a Short