Targa Resources Prtn Units (NGLS) Day Trade

4 May

Another stock I added last night to my watch list was NGLS so I watched it today.

Targa’s stock looked ripe for a bounced based on yesterday’s price action. You can check yesterday’s post to see my notes on that.

I watched the 5 minute chart to plan an entry. The first opening candle didn’t feel very convincing. The second candle showed a price rejection above yesterday’s high and a huge bearish engulfing third candle almost turned me off to this trade. I looked for a follow through candle after the large bearish engulfing candle which would have definitely kept me away from this trade.

But, surprisingly, prices moved up and kept trying to break above yesterday’s high but kept getting rejecting until there was a bit of 5 bar consolidation starting at 10:40am.

Around this time, I figured if buyers could bring prices above the bearish engulfing candle’s high, I would be in this trade. So, I put a buy stop above the bearish engulfing candle at $45.20 and at the same time, a stop loss at $44.40; which was the low of the same candle.

At 10:20am, there was a breakout of the consolidation range so my buy stop was triggered. There was a pullback after retesting support but failed to break the new support that had been previous resistance between 10:40am – 11:00am. Once this retest of support failed, the stock moved up nicely.

I took my profits at $46.40 after the 12:50pm candle stick when the stochastics had been in overbought territory for a while and the candles started forming a swing high point. Total profit for this trade was $1.20 or about 2.6%.

Whenever I have a decent profit on the same day as my entry for a no name, low volume stock, I try to take my profits fast and early. I especially hate holding them overnight. Anything could happen. A huge gap down on Monday would have blown away any profits. I would be more comfortable holding on with bigger name, high quality stocks; leaving runners for a longer swing trade.

Take a look at Targa Resource’s (NGLS) daily and five minute stock chart for today:

Targa Resources (NGLS) 5min Stock Chart - May 3, 2013

Targa Resources (NGLS) Daily Stock Chart - May 3, 2013

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