Stocks have Personality-- Learn Them and profit

One of the best things about creating a trading journal is that it becomes your very own encyclopedia.  Before I enter a new position I look to see how a particular stock has traded before during a similar move.  If I've traded it before even better.  

One recent example is HPJ.

I know that a number of traders rushed in on the gap move only to see an ugly fade. 

 I waited on the side lines and reviewed my trade journal. Last year I saw a similar high volume gap which faded initially.  

There are a lot of similarities between the two moves.  Last August, I bought HPJ as it fishhooked around the bottom. 

I was rewarded with a 3 day 30% move.  I sold this gap at $6.90 in pre-market.

In any event, last August's move in HPJ was my template for it this time around.  If it rallied off the gap, I planned to buy.  On February 10, HPJ sells all the way down to $5.00 and then reverses. I bought at $5.40

So far ... So good

HPJ is now up to $5.71.   This stocks ability to Fishhook after the 1st day fade tells us there is something more to this move.  Had I rushed in I would have been stopped out and would have missed this move.  But knowing that HPJ has a tendency to fade the first day move and then push higher allowed me to be in this trade. Now I don't expect the 30% move I received last time.  But who knows.