Here's one of my favorite daytrading patterns

Playing Hammers off daily lower Bollinger Bands on intraday signals

Even for the intraday trader, the daily moving averages and Bollinger bands can play a key role in the trades. Anytime a stock is trading near their daily lower Bollinger bands or 50/200 period daily moving averages, traders need to pay attention. On 1/11/06, we spotted (AMGN | Quote | Chart | News | PowerRating) continuing to sell off to overshoot and coil off the daily lower Bollinger bands at 76.38.

We took LONGS at 76.45 on the 13 minute hammer off the daily lower Bollinger band supports. We played the intraday longs to 77.25 to lock out for a nice .80 move intraday. AMGN eventually formed the daily hammer and squeezed as high as 78.50 the next day. This is one of my FAVORITE patterns. Utilizing the power of the daily supports with an intraday hammer formation makes for extremely nice gains. The vice versa can work on the shorts also.

Noodles are trying to pullback under the daily 5 supports at 1762. If the noodles can break the 1751 intraday or close under there, they have the makings for a fairly LARGE daily channel tightening to the daily 15s at the 1718 levels. Earnings season also kicks into full force starting Tuesday 1/1706. Earnings season is our super bowl, I will go over how we play earnings gapper/dumpers in my next article. Good trading all!