Quick Moves for Swing Traders

This week we experienced an intra-week swing trade in JBLU. We’re taking a moment to discuss our swing trade methods so that you can be prepared to handle these quicker moves.

Our MAC Breakout and MAC Continuation methods are complementary to one another. What does one do when a bull trend remains intact following the end of an MAC Breakout trade? Being to use the MAC Continuation method! That is exactly what traders have had the opportunity to do with JBLU since its current weekly uptrend began in July of 2012.

The MAC Continuation method requires us to “sit out” every other cycle in order to prove the strength of the current trend. That is to say, after the first MACC trade completes, we wait for price to return to the MAC low, then to return to the MAC high. After it has done both of these things, we set our next buy target for the MAC low. Thus, we only trade every second move between the MACL and MACH.

This week was a week in which we had already reached an MACL for JBLU, and as such were waiting for return to MACH. We saw this return on Monday, at which point our buy target was set to the bottom of the channel. On Tuesday, the buy target was hit at the bottom of the channel, and our Profit Target #1 became the top of the channel. This leaves us where we are today, waiting for JBLU to once again reach the top of the channel.

To review, any MAC Continuation trade following the first post-MACB trade requires in order:

1. A return to MAC Low, after which we wait for…

2. A return to MAC High, after which we…

3. Set the buy target at MAC Low.  When MAC Low hit, we buy, then…

4. Set the first Profit Target to the MAC High!