ATD/B - Alimentation Couche-Tard Inc

Ticker symbol - ATD/B
Company - Alimentation Couche-Tard Inc

I entered this trade today, Short sell at $14.55 for a possible $3 or so target.
Profit vs risk ratio = 6:1

I think they are some sort of food chain or other. OK, that's it for the research part of this post. Glad I've got that part over with...

I tried short selling them just last month but the price jumped on a super high volume day (they average around 300,000 shares per day and on the 21st they hit about 2.5 Million, I didn't anticiapte that). As a result of the price jump my Stop setting was activated and I automatically covered for a small profit.



















(I've really got to figure something out for these charts)

I circled my last trade in red. My current stop is $15 marked by the purple horizontal line and my price is marked by the horizontal green at $14.55. I see that the low in late April never made it to the lower trend line so I might expect that the next low may only go as far as $13 for a reduced target of $1.50 of which I may only get $1.25 per share. That is OK as my loss allowance was $0.45 so the profit vs risk ratio is still about 2.5:1.

To get more complicated I could draw two new trend boundary lines that would look like the trend is shallowing or getting less steep. It would make the target about $12.75 or so. See the following fuzzy chart:

The blue dashed lines would be the possible new trend boundaries, I also added the red line to show the shallowing of the "Trend Within a Trend" TWT (Yah, I dropped the A...you can figure out why) compared to the previous two. Perhaps this would have given me some warning as to the last trade well in advance as the price bounced off this red line on the 20th, the day before the big volume day. Note that this line would have been established on May 5th and confirmed on the 20th. It is also worth noting that the previous two TWT lines would have also been established, and held pretty close, after only one week following the bounce off of the trend low boundary. At the very least this should have been my indicator to leave a wider margin when placing the stop setting, it only needed to have been $0.20 higher and I would still have this trade active.

Lesson, draw the lines as early as there is a possible trend to see. I keep finding that these lines are more important than one might think initially and they can be adjusted along the way if needed.

JD.