Warrior Trading Blog

5 Stocks in 5 Minutes | Arsh’s Trade Analysis

Arsh_6.3

What’s up, traders? It’s Arsh, and I’m back this week with the latest episode of ‘Five Stocks in Five Minutes.’ Get ready to learn about five of the hottest stocks in the large cap markets. I’ll be sharing some of the most interesting trading opportunities on my radar. If you want to learn more about the details of how I analyze and trade the markets, make sure to sign up for the Warrior Pro, so you can access my options trading course. You can use coupon code ‘ARSH30’ for a 30% discount.

If you like the charting platform I’m using, there’s going to be a link to sign up for it in the description. Make sure to leave your comments and questions below, and I’ll be back to answer them later. Let’s dive into today’s video. …

Let’s begin this week’s video by analyzing triple Q. There’s been significant sell pressure in the markets lately, largely as a result of the escalating trade wars between the US and China. This technology sector ETF is down over 10% for the highs in May. The famous adage, ‘Sell in May and go away,’ definitely rang true this year. My strategies focus on trading with the trend, so I’m currently taking advantage of this down trend by trading short opportunities in stocks. Such as the Netflix short that I’m going to be sharing with you guys next.

We’re definitely starting to get a bit extended here, so we can potentially expect a balance in the coming few days. It’s really tough to pinpoint reversal points, so I’m not going to try and call a bottom. I do see some major support around the 167-81 area, though, so I think it’s going to be a good idea to keep an eye for a market bounce around there.

Moving on, I’m currently in a short position on Netflix. This was a trading opportunity that I have been tracking for many days. It finally triggered this morning. I was carefully watching Netflix for a short below 342-47 after I recognized this triple bottom breakdown set-up on its daily chart. The idea was to go short on the fourth break of that level. Based on the triple bottom breakdown strategy that I share, I alerted that as a trade this morning in the chatroom. So I first initially alerted the set-up that had formed there on Netflix, and then I alerted my trade entry using the 330 put options that I had bought.

I was able to sell about a third of that position for a 125% gain. I was able to buy some put options for $2.41, and I scaled out a third of that at $5.40 and $5.45. Definitely a nice initial profit from this trade. I’m going to continue holding on this trade as a swing trade for the next two to three days. I do think that there’s more potential for the stock to go lower from here, especially with the market being as weak as it is. I’m going to continue to hold on to this trade, and if we begin to bounce back above 342, that’s when I’ll go ahead and close out the remaining position.

Next up, we have a returning name, which is Invidia. If you recall from the May 19th episode of the show, I mentioned that Invidia was a perfect candidate for a swing short below the flat bottom base of 157-81. Looking back at that chart after a few weeks, we can see that the 157-81 flat bottom breakdown level definitely provided a fantastic short entry. The stock has fallen 15% since it broke that level. This is a great example of how you can use a technical pattern to help you take advantage of a clear trend that’s already in place. We can see that Invidia had been trending sharply lower before it formed this flat bottom breakdown base. It was only reasonable to assume that the stock would continue its downtrend if it broke that level.

The stock at this point is definitely getting extended. Although I’m not interested in going long for a reversal trade, chip stocks like Invidia are starting to look attractive for longer term swing trades. Trade wars are definitely a major catalyst for stocks like Invidia, so it’s important to be aware of any developments that take place there.

I’m closely watching TMO for a potential swing trade in the coming few days as it completes this bullish consolidation pattern. It’s been within these two trend lines for nearly two months, and I think that it’s setting up the stock for a breakout or breakdown in the near future. Considering that it’s been in a strong uptrend since the beginning of 2019, I think that this consolidation is pointing towards a breakout. I would consider going long above this upper yellow trend line. That’s now a three point trend line, and I think it would be reasonable to expect a breakout on the fourth test.

Now, if the market continues to act bearish, and TMO sells off towards the lower trend line, I’d like to see it first bounce off of that trend line so that it can become a three point trend line before considering it short on a break of the fourth test. So the stock may continue to consolidate within these trend lines for some time, but I’ll definitely be watching it closely for a trade as it begins to move out of them.

To wrap up today’s video, I’m watching Agilent for a potential trade in the coming few days. This has been one of the victims of the escalating trade wars, and we can see that the stock has now formed a consolidation between the 69-90 level, and 66-24 level. Currently, it’s looking like it may go for a breakdown of this consolidation, so I’m watching it closely for a short below 66-24. If the stock begins to stabilize along with the market, we may see it begin to move towards the upper end of the consolidation at 69-90, where we can potentially consider it for a long trade. This stock, along with a majority of large cap stocks, will be heavily influenced by the overall market. I’ll be watching SPY and triple Qs closely to help me determine which direction the stock may be headed in.

With that, I’ll go ahead and wrap up today’s edition of ‘Five Stocks in Five Minutes.’ Thanks for watching, and I’ll see you in the large cap chatroom.

Oh hey, I didn’t see you there. Well, I was just working on the dream board for my next home run trade. Hopefully it comes soon. Until then, make sure you subscribe to get email alerts any time I go live or upload new videos. Until then, happy surfing.