$PBI, Pitney Bowers Inc.

Trade Date: 2/1/17

            One of the stocks making headlines this morning was $PBI, Pitney Bowers Inc. The mailing equipment and software company disclosed a fourth quarter loss of $81.8 million and an EPS loss of $0.44, a 5% decline. Ouch.

Trading Style: Day Trade

Position Bias: Bearish

Technical Criteria:

  • Price Change: $ -0.92 and -6.72%
  • Premarket Volume: 16,600 shares
  • Daily Average Volume: 2.57 million shares
  • Average True Range: $0.62

Entry Price & Time

            Even if it gaps down, stocks can put in a fake out and short squeeze the life out of you. So I always wait for my familiar intraday setup before even considering a trade. If my setup does not appear, I was ready to let the stock go. The 1st three candles were weak, pushing the price lower. The fourth candle finally presented an entry when the pressure slowed down with a small base at $14.60. If the stock broke below the level in the next candle I was going to enter with a stop above the highs of the day. And indeed it did.

            Entry Price: $14.60

            Entry Time: 9:34 AM

            Stop Price: $15.20

            Risk: $0.60

$PBI Day Trade Entry on the 1 min. chart

Trade Management and Psychology

            Psychologically, this was one of the easiest trades to manage making it unsurprising that it was also the biggest winner of the year. Immediately after I entered, the stock barely retraced above my price. Once my profits grew, I remained calm because there was no need to be nervous. All I wanted to do was follow my rules. During this trade, I never looked at my P&L, only the chart. 

Exit Price & Time

            Once I entered the position, I switched the time frame of my chart to 5 minutes candles. I planned to exit the position if either the price moves up to my stop at $15.20 or if the price jumps above the 9 EMA, whenever that may be. The stock never recovered above my entry price and it finally broke above the 9 EMA at 11:51 AM, at which point I closed my entire position.

            Exit Price: $12.75

            Exit Time: 11:51 AM

$PBI Day Trade Exit on the 5 min. chart

$PBI Day Trade Executions

$PBI Day Trade Executions

Results and Evaluation

            Since the start of 2017, this was the best trade I made. Poor quarterly performance and strong relative volume put probability on my side. Right at the open, the trend was strong and I rode it down. I followed my rules perfectly entry and exit executions.  

Risk: $0.60

Reward: $1.85           

R Multiple: +3.12 R