Sunday, July 24, 2011

Trade idea: TXN short

Texas Instruments (TXN) gapped down on July 11 and has since recovered, trading up significantly over the past week. If the stock fills this gap at 32.44, it should meet significant resistance.

In addition to a gap fill, this level also corresponds closely to a 61.8% fibonacci retracement and a previous pivot/area of congestion.

I'll look to enter this short trade on a break of the 32.44 gap fill area and will stop out on a daily close above the 50 moving average.

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