Big T analyzes the intraday short of FTBK on 4-26-10

A few traders in the Twittersphere entered the big runner which kind of resembled ABIO of the day before, by entering above 7 bucks when it consolidated.

I do not like this play.

I prefer a clear cue signal to enter. This occurred when the stock broke below consolidation on volume piercing the critical 7 level.

This was a good short from then on, in my opinion. See the chart below, with quick and dirty fib levels attached:

This stock was very strong today. Without a clear intraday support level breach, any number of idiots could have arrived late and sent it back up. The jury was still out as it consolidated, so sentry duty was called for.

True, the second consolidation high was lower, and the live price action by that time hinted at things to come being red, as no serious feint at taking out the daily high occurred and the sidewinding went on for at least an hour. 

Nevertheless, I  cannot stress highly enough the importance of letting clear technical level conquering decide which side of the fence to be on. And selecting plays where those levels are clearly drawn.

Here, the correct thing to do was wait for that to begin, then go short. Plenty of downside is usually left, as was the case in FTBK today. Anticipating the play is usually more risky than letting the market decide first!

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