Although I don’t have a hard rule went it comes to stop triggering, I typically use a candlestick close above my stop level based on the time frame that the trade was based off of. For example, if a trade was based off a weekly chart, I will look for a weekly (end of day Friday) close below or above my stop criteria.
The active CP short was based off the daily chart and will almost certainly close above the recent high of 94.83, thereby triggering the suggested stop on this trade. Therefore, barring any crazy reversal into the close and a move back below at least the 95 area, CP will be considered stopped out and moved to the completed trades category after the closing bell today.
I should point out that I will continue to monitor CP closely for any signs of a reversal over the next week or so as the chart still looks very bearish to me. The reason for the large, stop-clearing move today, believe it or not, was this:
Canadian Pacific Railway Ltd(CP) gained 3.6 percent to C$96.32 after the country’s second-biggest rail carrier said late Tuesday it would cut 4,500 jobs by 2016 as part of a drive by its new CEO to slash costs. The company played the biggest role of any single stock in leading the market higher. “This is what shareholders have been looking for. This is what they have been hoping – that CP will face the challenges that they have. The new CEO is making his mark,” Ketchen said.