BOUGHT +58 CAF@ 28.89 LIMIT
CAF
This is suppose to be another of my GTC limit order before leaving to Taiwan. I’ve set the buy order at $25.0 on 25th. I got back on the 30th (29th EST) and CAF looked strong. So I wanted to replace my $25 bid to $26… However, I wasn’t careful and the trading platform changed the limit price to the market ask without me realizing until I placed the order. Of course, then the order was filled and I got in at $28.89, higher than I would have wanted. I thought of exiting the position immediately, at a small lost, but decided against it because I felt CAF is going strong. I didn’t need to pick the bottom and I was never good at that anway. So I chose to stick with this entry.
But what do ya know, that afternoon, the US House decided to reject the $700-billion rescue plan. DJIA tanked 777 points that day and the financials were hit the hardest of course. My $26 bid would have seemed like an ingeneous entry as CAF hit a low of $25.11 that day. However, I wouldn’t have guessed that.
Given the high amount of volume at the low and near the end of the trading day, I doubt we will see that price any time soon for CAF. $25 is definitely a strong support.
Upside: Daily chart still looks good. Financials are in severe panic mode.
Resistance: A downward trendline is capping recent highs. $30 round number looks like the high end of trading range.
Downside: Possible turn to bearish from indicators. Financials earnings coming soon, the numbers aren’t gonna be pretty.
Support: $26 looks like the bottom of the trading range we’re in now.
Bottom Line: CAF has weathered the Dow 777 day drop with style. It has shown strength at the worst of times. However, don’t expect a steady climb from here. At this market’s condition, anything is possible (i.e. more panic days in the coming weeks and CAF would be thrown out along with the financials again). I don’t think this is to be a buy and hold position yet. So watch for breakouts either way and be ready to trade in and out.
On another note, if I have more funds, I’d rather be scaling in CAF on the lows for the long term instead of swing trading for a few bucks.
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