Opening Drive Flashcards
What percentage should a stock be gapping up or down to be considered for an opening drive trade
+/- 3%
If this is going to be a short play for the ORB, how should the after hours and premarket price action be behaving?
They should both be trending down.
How should the price be positioned in regards to key levels?
It should be below a key level or longer term technical level.
What major catalyst should be affecting a stock being considered for an ORB?
Unexpected news catalyst.
What aspect of volume should be affecting a stock that is being considered for an ORB play?
Elevated RVOL
If the street is not happy with an aquisition, or thinks the aquisition is risky how does this affect a stock?
Negatively, this can cause a major sell off.
How does high institutional ownership affect a stock with negative news?
Dramatically, institutions will need MULTIPLE DAYS to sell off their shares of stock, as their positions are Very Large.
Above what number is RVOL considered high?
3
What ETF indicates the key level of strength or weakness in the semiconductor sector
SMH
What other indicator should you check before trading a particular stock in a specific sector?
Other stocks in that sector, to see how they are behaving (strong or weak)
If you are trading a stock in the semi conductor sector to the down side and the SMH is in a strongly moving uptrend, what effect might this have on the stock you are trading?
It could cause a stock moving to the down side on negative news etc, to have a significant bounce, as influenced by the SMH.
What does a chart with no bounces and a long trending move to the downside represent?
A weak stock, there are no bounces, no buying is taking place in this trend.
If you are planning to trade a stock that you expect a big move from, where should you look for support or resistance
At the next KEY Support or Resistance Level, Visible on the Daily chart.
If a stock breaks a 30 min support level premarket a few minutes before the open, is this a potential entry? True or False?
True this can be a potential entry if all variables line up.
What is happening when the bid is dropping?
No buying / bidders. No support at this price point.
What does this candle represent in this specific situation?
When combined with the volume candle, it shows selling exhaustion
In how many minutes is the ORB usually played out?
About 10 Minutes after the open
What nature should an in play ORB show at the open?
Speed and Direction, pressure in a direction quickly, once that direction is chosen.
How are risk levels often determined for an ORB
From premarket levels that were evaluated and drawn on the chart.
Is a Psychological level a benefit when setting up risk
Yes Psychological levels can provide strength in a move, or strong support or resistance.
What market indicators can you check to see whether your trade will be moving in the direction of the market or against it?
QQQ
SPY
VXX
$TICK
Who are going to be the big players in an ORB move when the news warrants their attention?
Institutions will size into or out of stocks with news that affect the holdings / lack of holdings.
What large factor can be assessed and shows whether or not news will affect institutional movement in a stock, immediately on release of the news.
Institutional holdings. If institutions hold a large amount of ownership in a stock, and that stock is affected especially by negative news, the institutions will have to sell over the next few days to relieve their positions.
What is one place that psychological price levels often form?
At all time highs, these are often whole dollar amounts.
What is the first thing you should be doing/considering when taking a high moment trade like an ORB?
MANAGING YOUR RISK!!!
Trying to get the BEST PRICE.
What is a good indicator that you might be right in your thesis on an ORB, long?
When the price breaks above the Opening Range
When the price breaks above the Opening Range on an ORB long, is this a good place to add shares?
True, if the tape is showing strong buyers, this is a place any shorts will need to get out, and big buyers are stepping in.
Where and how should you make your entries in a volatile ORB move?
By BIDDING at LEVELS you expect the price to pull back to, on volatile price action/candles.
When is a definite time to exit the last of your position on a stock that has been halting up continuously?
When the large stacked bids can no longer hold.
