Trade Date: 03/15/2017

            $MSCI stock gapped up 13.01% into All Time High territory after the company denies rumors of a takeover bid from S&P Global. Stocks don’t necessarily need to fly based earnings reports. PR news combined with emotions from Wall Street can be enough to drastically push a stock.

Technical Criteria

  • Price Change: +$ 9.76 and +13.01%
  • Premarket Volume: 765,860 shares
  • Daily Average Volume: 711.67 thousand shares
  • Average True Range: $1.56

Trade Style: Day Trade

Position Bias: Bearish

Entry Price & Time

After the gap up, the stock exhibited immediate selling. Traders fortunate enough to enter a stock before the gap are now realizing their profits and selling their positions. Sometimes if the selling pressure is overwhelming, the stock drops dramatically. When the Bear Flag materialized at 9:33AM I entered for a short on confirmation.

            Entry Price: $106.28

            Entry Time: 9:33 AM

            Stop Price: $110.00

            Risk: $3.72

$MSCI Entry on 1 min. chart

Trade Management and Psychology

            After entering this stock, it barely moved. I thought this trade was a dud. Just one of those days I guess. If I lost, at least it will be a small loss.

            10:55AM: Trade is Halted! Why? I only risked 2% of my portfolio so if it opens higher above my stop I will just immediately close the position and take the loss.

            11:26AM: After about 30 minutes of extreme boredom. I couldn’t believe it. A drop to $99 and it was falling lower! Wow!

Exit Price & Time

            FOMC announcement today, so I had to close my position before Yellen’s announcement on interest rates. A small fat finger mistype messed with my exit, but it accounted for only a small loss.

            Exit Price: $98.85

            Exit Time: 1:43 PM

$MSCI Exit on 5 min. chart

$MSCI Executions

Results and Evaluation

            The halt and the preceding drops were really scary. In fact, getting stuck in a trade is really rare for me and its actually pretty horrible when it happens. Fortunately after it opened it dramatically worked in my favor. It’s hard to be calm during halts, but it’s something you have to do.

Risk: $3.72

Reward: $7.43           

R Multiple: +1.98 R