I have received several messages today regarding the recent SHOO (Steve Madden) trade, and thought I would go over the process in more detail.
It is true that this was in the Knife Catch category as I caught the down move too late to short. Those that were short, congrats. My view here was that it would need to find support, and hold, above the 40 level. I posted several charts on Chart.ly with this being the latest: http://chart.ly/cfhwgnr
Once I had seen 2 days of buyers coming in, I put on a Long position. Today the stock gapped up and is currently at 42.65 (as of 3 PM EST). I have sold 1/3 at 42.5 and have raised my trailing stop to 42 on the balance. The stock has avoided the 50d all day, on the 5m chart.
Other Knife Catch trades that I am currently stalking are: MCD & FDO.
I like your ideas. Where can I see a summary of your knife catch ideas? @AnchorLBC on stock twits.
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