Each day, especially during this bull market, there are stocks that meet the criteria for a day trade on the open with minimal risk as outlined in this past post:

This is a simple system in which the stocks are selected the night before and bought at the market on the next day’s open. They are monitored on a 5-minute chart with a stop-loss on any close below the open after the first five minutes and the day trade is over. If a stock does not stop out right away, it will immediately be in profits. If the stop does not violate its open any time during the day the profits can be taken on the close to end of day trade.

Those profits will often hold to the close of the day especially in a bull market, but what if they don’t? What if there’s in intraday reversal in the stock? In the market? Needless to say, those kinds of intraday reversals happen almost as often as they don’t.

So what to do? Today provided examples of how this works both using the 5-minute stop as well as when to consider closing the trade during the day to increase and maybe maximize profits. There were three stocks from the ten stocks on my bellwether-stock list for the 5-minute buy on today’s open – FB, TSLA and NVDA.

FB, as example of the stop loss, was stopped out immediately for a .20% loss. Had that stock been held to the close, it would have lost 1.12%.

TSLA was profitable for the day and closed with .47% gain, but had it been closed when the general market sold off during the day (see the vertical line on the chart below), it’s gain would have been 1.6%. NVDA’s profits held for the day and it close with a 1.3% profit but, like TSLA, had it been closed when the general market sold off during the day (see the vertical line on the chart below), it’s gain would have been 2.1%. The difference today between the close on those two stocks and the intraday sell is obviously sizable.

In addition, they are prime example how stocks, no matter how strong individually during the day, most often follow the market (see the charts below).

Stocks used for this system are usually posted in my daily blog but I’ll mention them here for tomorrow’s open: NFLX and BABA.

(click on the charts for a larger view)

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