MCP Update

Last week I opened a half size position in MCP looking for a pullback which is just in the green at 1.5%, even though we saw the pullback coming, the core/trend MCP long position was left alone, no trading around the pullback because I like MCP a lot as a long term long position and that core long is up +12.5% even with the pullback.

What we saw on Friday as per this update from Friday looked like a head fake move just under a larger reversal process, it definitely hit stops as could be seen by volume right under support. (See the previous update for more background)

Right now it's in a smaller reversal process that's part of the larger one, it's actually still the head fake area and so far, so good.

I want to add the second half of that position to bring it up to a full size trading position, but I want to see some more migration in the positive divergences before doing so although I suspect this area is probably about the right area and timing is probably pretty close. Remember, MCP is one of the few stocks that will go against the market's tide.

Here's what we have so far this morning... From micro to macro

 We have the "W" base and the pullback/shakeout . At the yellow area a rounding reversal-like process which is under the stop level taken out Friday. It's possible this morning';s volatility is the warning flag that we are about half way though this smaller process (yellow).

This is the same chart just a bit closer on a 5 min timeframe with the stop run at the red arrow forming the basis of a head fake move as long as it is verified by 3C as being accumulated which is high probability based on the longer/stronger charts.

The 1 min 3C chart shows a weaker, but larger relative divegrence right until those stops are hit, someone is on the other side of the trade and notice that's when we get a stronger leading positive divegrence so my initial impression is those stops were accumulated, it's an easy way to pick up a larger number of shares on the cheap without alerting anyone as to what they are up to, I never understood why Technical traders never considered who was on the other side of the trade in a stop run like that.

 The larger 5 min chart shows the strong base with a leading positive divegrence (W base) then the weak negative divegrence that caused the pullback which is when we closed MCP trading longs, but left the core position in place. You can see the head fake area at the yellow trend line and the 5 min chart seeing some migration of the positive 1 min divergence in the area as the 5 min chart is starting to lead which is good for confirmation, but I want to see this really pop on the chart, stand out and scream "Buy me". In any case, so far, so good.

 A closer look at the 5 min chart from the reversal/pullback area where we exited the trading longs, a small "W" base and a small pullback, all are in leading positive position so the probabilities of this resolving to the upside are very high, for me it's more a matter of timing than anything and whether there's an opportunity that forms for a call options position.

This is where the larger probabilities are, the 60 min chart with a large "W" base, the breakout and pullback I was hoping we'd see. Note to the far right the entire pullback area is leading positive so again the probabilities are all saying this resolves to the upside, it's just a matter of the intraday charts migrating and connecting with intermediate charts as far as timing goes and additional/stronger confirmation.

At that point, I do want to add to MCP long and bring it to a full size trading position.