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KLAC Stopped Out for 1.8% Loss

KLAC exceed the suggested stop of a move above 69.20 (69.21 stop) for a minor loss of 1.8%.

KLAC daily Sept 1st

KLAC daily Sept 1st

 

I set the stops tight on this trade for two reasons:

1) Any move back above 69.20 would have not been consistent with the typical move following the breakdown of a bull flag pattern, which was one of the main reasons for the short entry. Typically, prices move impulsively lower following the breakdown of a bull flag continuation pattern, similar to the move leading down into the flag formation and as such, this recent bounce in KLAC was a sign of non-confirmation for that pattern.

2)The broad market continues to trade in an extremely tight sideways range and as such, I've been keep stops on many of the long & short trades on the tight-side as the potential for whipsaw buy & sell signals in a sideways market are increased.

I reviewed the semiconductor equipment & materials sector this morning & overall, the majority of stocks within the sector still look poised for a correction so KLAC may be revisited as another short trade soon along with some new trade setups in the group.

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Sep 1, 2016 9:38am|Categories: Completed Trades - Short|Tags: |3 Comments

3 Comments

  1. ben711 September 6, 2016 1:47 pm at 1:47 pm

    Any updates on KLAC ?

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    • rsotc September 6, 2016 2:39 pm at 2:39 pm

      ben- While KLAC is down today, there’s not really anything new that I see in the charts. I still think that KLAC & the semiconductor equipment stocks look poised to be headed lower but don’t see enough evidence in the charts in both the sector & KLAC in particular to add it back as another short trade just yet. With that being said, if you shorted it & gave your position a little more leeway on the stops vs. the very tight official stop then congrats as I still think there’s a good shot that it will hit the former target of 63.26. If not, I think a stop a little above 71.80 (resistance) seems objective & will still keep losses relatively small based on the entry price of the recently stopped out trade. G-luck if so & if you’re out looking to get back in, best to wait to see if the recent breakout on the QQQ 60-minute chart that I highlighted on the front page of the site earlier today fails as KLAC & the semi equip sector & the semis themselves will likely move sharply lower if QQQ can impulsively take out 116.

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  2. ben711 September 6, 2016 3:52 pm at 3:52 pm

    Thank you. Snapped right back

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