Surprisingly I traded a lot today. I ended up essentially flat to a slight profit. I saw some decent opportunities today despite the holidays. I did have the chance to make a very good day happen but my breakeven stop took me out at the bottom of a play when I had some decent size with low risk so that is definitely a negative in the breakeven stop column. The losers I had I was eventually right on (just poor timing/too early) - how familiar..
WTW: I was going to be careful with this because I know most of the float is short this (and for good reason). But I thought it was a total pump job and was still interested in shorting it if it setup. It had some nice volume near $12 and then had a fake high wick by one penny with no followthrough. I thought this might be a good opportunity. I got in at a good price and it ended up coming off by 20 cents or so, so it looked good. But then it started to curl back up and I contemplated getting out for flat but decided against it as I thought it was still a good pattern with the overall thesis being that chasers would bail assuming there weren't that many shorts. But it did end up breaking $12 so I stopped out. The only other time that interested me was at $12.50 on the big volume and another fake high. I thought about getting back in and also put in another offer but never got filled. I thought that it would definitely at least fill $12.50's offer and then possibly coming back down but it never got past it. As I said in a prior post, I have to remember to not confuse a "legit" stock like this vs. a total diluting pig with all the tricks. I thought about shorting a breakdown when it was still above vwap but thought I would get screwed by doing that since this stock likes to do that. It also had support right near it so I didn't think it was a good candidate for that although it did end up working. I didn't trade it later in the day although I did think about shorting it at vwap which would have worked. Another thing to note is that it wicked through support and got bought back up and then looked like it was going to reclaim that level. But when it started perking, it never cleared that resistance and started coming back off again and eventually fading even more which goes to show that anything can happen of course. Lessons: First trade was a valid attempt although I had a feeling it would go higher first before coming back off but it was worth a shot. As for the $12.50s trade, remember that anything can happen and if something should go higher and break through a level but doesn't then that is a warning sign.
GPRO: I saw that this was going up on takeover chatter which was complete BS and I knew it. It had some very nice volume exhaustion in the 9.30s so I gave that a shot but stopped out as it went higher. That was the extent of my trade in it but what I should have done is look at the hourly/daily to see where it has real resistance and I would have noticed a similar spike last week on similar news and it went to 9.60 which just so happens to be the same spot this topped out at and also had huge volume as well. Someone wants out of course at those prices. Had I seen that I would have waited. This reminds me of CXW with the exact same scenario of being too early but eventually being right on it. So the lesson here is to look up what it did in the recent past in terms of news on longer term charts.
FDX: This was the big screwup for the day. I saw it had a decent looking inverted H&S and it fit the bill of one of the patterns I have noticed before. I got in with 5 cent risk and had 100 shares. It started moving up but I thought to myself this is a stupid trade so I just put a breakeven stop. After the prior couple of days I knew how little paper cuts add up so I didn't want to lose even $5 on this trade so I just put that breakeven stop thinking that if it was going to work then it would work right away and it did work right away pretty much but not without stopping me out at the bottom of a wick and then going higher completely past any expectation I had of it. So the lesson there is I guess not to discount anything. I still need more data to determine whether breakeven stops are good or bad for my style but this one definitely stings. Also, I saw a nice rejection pattern once it made new highs and came off but didn't short it due to low volume but it wasn't so bad and it's a large cap stock so it shouldn't be an issue. It worked out fantastic and later in the day it also provided a very nice opportunity so don't let less than stellar volume dissuade you.
FINL: I tried this a couple of times but realized my entries were poor both times so got out for flat essentially on each try. This was similar to the ACAD trade from yesterday where there was too much support from the day before where I was shorting hoping it would fade off for it to work. I mean it could have definitely worked but where I shorted was definitely a chase and it should have worked immediately so I just got out when I thought it was a trap which it did end up being. By the end of the day though it did fade close to where my target was. Overall, this was a sketchy one to trade.
BBBY: I thought this could fade but it didn't provide an entry that I liked and the fact that it made such a large move in the morning I thought it was done fading as I have seen with other stocks. I thought about shorting it at vwap but decided against it as again I thought the move was over with. I probably would have stopped out although in the end it did work and fade even more. If it got back to $42 I might have tried it but otherwise I really thought that was it. Later on though it did provide a very nice pattern of just peaking at the prior support. But for some reason I saw it as reclaiming support so went long but ended up getting stopped out. This was a stupid trade and definitely was not as clean as FDX was for example. This was a very clean short setup though and it shows because it worked great.
RHT: I had this on bounce watch as I thought it was way overdone. I wanted to let it puke out first or have some higher lows or start holding above some premarket support before I went in. It faded right off the bat and then eventually had a very nice bottoming wick which I didn't go long for unfortunately but definitely saw the opportunity. I didn't bother buying any dips or anything as it seemed weak until it setup nicely for a breakout which I did go long for. I ended up selling way too early though because I was afraid it would come right back down and get me out for flat which seemed to be the case lately. But this was a mistake overall as the pattern was good and I thought it could bounce. I was going to sell it at 70.95 which ended up being the HOD so that would have been nice. After it started coming back off though it looked like a failed breakout because it got back under the prior breakout level and seemed to be holding. I thought about shorting but wasn't really sure as it wasn't too clean since there were a couple of resistance spots but overall, it did fade back down. One thing to also note is at the end of the day it formed a base at $69 and went below it by a penny so it got some shorts trapped but it only pushed up a bit and then came back down. This is a good pattern to short with a tight stop as I have seen this before where it does this but it doesn't have any juice left to squeeze the chasers further and then it settles back down and really cracks it. It is better to be short beforehand though and take the leap of faith if it sets up. This stock was a good example of switching biases based on the price action.
MU: I was originally long biased but I saw everyone kept being bullish on it so that made me weary. If it washed out more at the open I would have taken a shot but it didn't go far enough down. I didn't really see a trade in it on the long side. On the short side though it made a nice lower high and what got me interested was it wicked above the support and came all the way back down and got rejected nicely so I immediately shorted right afterwards and was in the money right away. I ended up covering too soon it seemed although I followed my plan to just scalp it since overall it was bullish. It did end up coming back later in the day. I just didn't expect it to come down a lot further. Overall great trade and good process.
BABA: I was short biased out of the gate but didn't see a great spot to get in short for the morning flush. It bounced back and then had some lower highs and then came back under vwap and had a nice pattern. I got short. It did consolidate for a while and it at times got me thinking I made the wrong move and I thought about taking it off for breakeven but was confident in it and it ended up working well. It didn't go as far down as I had hoped but it was a decent trade nonetheless. I guess there are psychological lessons here to be learned although I have already discussed everything involved.
Things to remember:
1. Fake highs/lows don't have to be it for the day. It can just be it for a bit before it regroups and heads back higher or lower.
2. Don't confuse what happens in one stock with another.
3. Diluting plays are different from legit stocks that happen to have big offers and bids.
4. When you see a big offer and the stock rams right into it without filling then that is a good sign for a top.
5. Look up what it did in the recent past in terms of news on longer term charts.
6. Don't discount anything and also don't let lowish volume affect you.
7. Look more closely for the patterns to make sure you are getting them right.
8. When a stock guns stops but then comes right back then go long/short.
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