For this trade, QCOM has been consolidating under a declining trendline of a wedge (lower trendline omitted). On 5/26/11, a long position was entered after it has bounced off the 20 EMA and moved above the 56.96 level with the initial stop loss level set beneath the 20 EMA. The first profit target is the last pivot off the trendline at 58.46, and the objective target is the high near the beginning of March, 2011 at 59.84. These trading levels will provide the 2:1 R/R.
When the market reopen after the long Memorial Day holiday, QCOM broke above the trendline and the position was scaled out as the price crosses the first profit target level of 58.46. After reaching the first profit target, the stop level is moved slightly above the entry price level to prevent a profitable trade turned into a losing trade, and also to lock it additional profit.
Today, June 1, 2011, market open in a slight negative tone. When the ADP and the ISM numbers came out that fell short of expectations, the market sold off and QCOM was no exception. As it tried to hold above the stop level throughout the session, it finally gave in on late afternoon and the stop was hit and the position was closed out.
Here is the chart showing the various levels and commentary for this trade (click on it to view a larger image of the chart.)
