Trading Olympics: Event 3 - Market Timing

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The world of Olympic sport is all about timing. Whether it’s picking the right moment to turn up the speed or staying in sync with teammates, timing is critical.

Good trading is about timing too.

You can have a the best idea on the Street but if you pick the wrong time to buy, a few seconds can turn that good idea into a bad trade.

To find the right time to buy you need to look for signals in the charts and in trading volumes. It's a skill that requires a great deal of training as well as confidence in your own abilities.

But mastering this technique is crucial if your goal is a winning trade. Following are a few examples of volume spikes resulting in big moves, compliments of Guy Adami.


Lehman experienced a big volume spike on June 12th. The stock jumped 15% in next 3 days.

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UBS experienced a volume spike on July 15th. The stock jumped 26% in next 6 days.

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Symbol
Price
 
Change
%Change
MA
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Near its 52-week high of $320, Mastercard received upgrades from two firms, and that was a sign that the top was near. The stock now trades around $245.

The Bottom Line: When you see huge volume, a news catalyst and a 52-week low think about a timing trade. And on the flip side, a stock on a 52-week high that’s getting upgraded could mean the top is near.




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Trader disclosure: On Aug 19, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (CY), (MSFT), (WMT); Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (AAPL) And Is Short (AAPL) Calls; Pete Najarian Owns (CSCO) Call Spread; Pete Najarian Owns (LEH) Put Spread; Pete Najarian Owns (MS) And Is Short (MS) Calls; Pete Najarian Owns (NVDA) Calls And (NVDA) Call Spread; Terranova Owns (AAPL), (BNI), (CME), (EOG), (FCX), (GS), (GOOG), (INTC), (KOL), (NOV), (POT), (RIMM), (SA), (XLF), (SU), (X), (VLO), (YHOO); Terranova Owns (AIG) Puts; Terranova Is Short Crude Oil Time Spread (Short Dec. 2009, Long Dec. 2012); Terranova Is Long Crude Oil Futures (Dec. 2012)

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BRE), (CNTY), (CLB), (OFC), (DLR), (ESS), (EXR), (FL), (IAT), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (SKT), (BLV)

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)