DRL was on my May 12 Watch List after its big move on Friday. DRL started the day in the red, but slowly moved up and went green on the day.
I had an alert set for this red/green move and placed an order at $3.08/share once I saw that the red/green move was sustainable.
I sold at $3.30/share to lock in profits of $0.22/share, however, the stock ran even higher. I took my easy gains in a matter of minutes. $3.30 was an arbitrary number, but I wasn’t patient enough to deal with the intraday fluctuations of the stock. DRL pulled back down to $3.07 a few minutes after I sold but soared to $4.47 at the high of the day.
Later during the day, an ascending triangle pattern was formed and I tried to place an order around $3.60 but never got my execution. I didn’t want to chase the stock considering it was already up on the day a lot and there was a lot of short interest.
Main Lessons Learned From This Trade:
- Red/green moves are great indicators when a stock is already on a lot of people’s radars. The red/green move had significance because so many people were watching DRL after Friday’s move.
- Ascending triangles are still one of the best chart patterns that can result in huge gains
- Never underestimate how much a stock can run (As discussed in this post). DRL was up as high as 48% on the day with no news. There were multiple chances to cash in on this breakout.
- Locking in profits is not a bad thing. Clearly, I could have made a lot more money from this trade if I held. I also could have lost a lot of money. Regrets will get you nowhere in trading. Any profit is good profit.
- Having the right stocks on your watch list can help you catch on to significant movements before other investors
Here is the illustrated 2-minute intraday chart for DRL:
