Page 375 - THE MARKET WHISPERER
P. 375
THE MARKET WHISPERER 37 1
When the market started trending up continuously and determinedly,
as it has done since March 2009 [2], a rare situation occurred in which the
long-term trader could profit more from the market than the short-term
trader. The sadder aspect is that generally such investors also absorb all
the lows. The overall outcome is that they tend to cover their losses, and no
more. I have yet to meet a long-term investor who knew how to exit prior
to the collapse, and buy exactly at the bottom.
Integrating Tools
On May 28, 2010, our trading room traded in a stock that, extraordinarily,
integrated several of the tools we have learned about in this chapter. It was
an excellent trade, which provided my colleagues and me with the best
trade of that day. We traded the stock of 3Par Inc.
Trading with 3Par, PAR
On the day before our entry, PAR rose almost 10% from around $9
to $9.89. We call stocks like these “momentum stock.” They are strong
stocks, which we like finding prior to the day’s trading, assuming that the
previous day’s momentum will draw new buyers and will also continue
into the next day.
PAR’s momentum did not disappoint, and when trading opened, the
