I've been sending out my daily list of best stocks to day trade for a couple weeks now, and my subscribers have had the opportunity to nail some nice moves. I wanted to highlight one trade in particular that had all of the characteristics we look for in identifying a potential day trading opportunity.
If you will recall, Tuesday was a huge up day in the stock market, and most stocks exhibited nice gains. However, we are looking for the lowest risk opportunities, so in the case of potential long trades, we tend to look for stocks that are actually already trading in an uptrend of intermediate term duration. These are the stock market leaders.
Heading into Tuesday, SNDA was among those stocks that had been trading higher for a few months, and was threatening to break out again. Furthermore, even while the market had declined sharply in the previous few days, SNDA was holding its own. Its trading range contracted sharply on Monday and its volume was light. All we needed for this stock to make a sharp move to the upside was a solid up day in the overall market, which was long over due for such a day. The chart below is a daily chart of SNDA going back a month.
As you can see on the daily chart, on Tuesday, SNDA headed much higher. This was a classic directional move, that lasted a couple days, and exhibits many of the characteristics we look for in our day trades. See the intraday chart below.
As you can see, you could have applied any type of opening range breakout strategy to capture this one directional move for the day.