Even though the NASDAQ has gotten a bit of a bounce, shares of JDSU undercut the $66 level by 13 cents and triggered our downside alert. We went into the trade only willing to risk $2 and we need to stick with the plan here. While we get the feeling we may have been manipulated out of the stock, we didn't get that feeling when we were shorting near $80 and we'll book the loss while it's small. Risk/reward remains favorable for bulls if our downward trend is broken. We'll make note here to place our stops 25 cents below and above alert points, just in case this was a move by institutions to get some cheaper stock.
Semiconductor Index Chart - 60-minute interval.
Adding to the recent action in shares of JDSU and our possibly getting manipulated out, traders that were able to watch the SOX.X trade higher and get back above a level of horizontal resistance may have been able to better manage the JDSU trade. We're not saying to deviate from plan, but in future trades, we'll start using a stop that is 25 cents above or below round numbers. The 50-period MA on the SOX was broken in the past hour and we're now watching our downward trend for potential signs of strength.