Lets take a Insight look into today's FLR trade which netted about 2 points this am in ugly down tape. FLR was on the watch list unfortunately because its a Newsletter stock this week. ( Both FLR and FWLT have performed well and FWLT EPS ran the stock 5 points)FLR reported good EPS which beat most estimates but apparently didn't 'shine'. It had spent most of the pre market trading in a tight range slightly below the closing price of 57.49. The stock opened at $57 and immediately was hammered all the way down to 53.50. When this happens it is usually caused by stop orders in the system getting executed at bad prices.
It seemed like a decent risk/reward trade to put on with a 1/2 pnt stop at 53.60. It worked out well as it rallied quickly from there and we got a nice fast trade out of it. Remember: Heavy PM trading is very important to watch to get a grip on if the opening is tainted.
We will have more trades out of this type of hedge fund technique
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