The winning exit strategy

So tracking six stocks was kind of fun, but at the end of the day, I couldn't really get an edge on trading them.  With the Fed Reserve pumping cash into the system, QE is inflating pretty much everything out there.  I could have thrown a bowl of spaghetti at the Wall Street Journal quotes page and would have made money on everything covered in sauce. 

So I'm hoping that this is a good spot for family and friends to read and monitor some good trades.  Over the past few years, I've followed PnF trades, bullish wedges, bear flags, Head and Shoulders patterns, etc. - basically everything.  If you take a look at any chart, you can spot 3-4 patterns - depending on the time preference.  And everyone trades different. 

Personally, I'm not loaded.  I'm investing in my personal 401K and I don't have that much scratch in it.  I've never had a problem picking a winning trade.  I can spot and scan a winner with the best of them.  My problem has always been picking the right time to take profits.  I discovered the Green Line charts on Stock Charts, and it was really what I needed to help craft an exit strategy. 

In no way am I trying to hijack Joanne's method, but it's pretty damn good and her rules are simple. For me, they've really helped build confidence on an exit strategy of a winning trade.

Let's use Boyd Gaming as an example.  Boyd showed up last week as having a slow stochastic under 20, is above the 250 day EMA, and has a strong SCTR rating (>90).  Last Tuesday, the stock was trading at 11.84 when the slow stochastic turned up.

On the 60 minute chart, Boyd moved over the 10 day moving average, with a slow stochastic move above 20 and a MACD crossover.  September $12 call options were trading at 0.43 per contract on Tuesday.

The confirmation on the daily chart and 60 minute chart, made this a solid setup.  Sure enough, Boyd ripped up at the open today and eventually hit a high of $12.58.  Looking at the daily, the stock tried to push through $12.54 and just couldn't get anything going past $12.58 and failed miserably.  But after closing out on the 50 Minute EMA, options were trading at 0.77 per contract - an 80% return.

 When a stock can't bust through resistance, drop it.  Anyway, just wanted to share the anatomy of a winning exit.