Warrior Trading Blog

A Great Mid-Week Trade for Almost $4K! | Mike’s Trade Recap


Hey, what’s up guys? It was a great day of action here midway through a what’s going to be a short week after the holiday weekend. Really great trade on A&F this morning for just under $4,000, one single trade, some really good price action as the market followed through from a move out of its range bound trading, which brings in volatility, some volume and some momentum. We’ve been lacking momentum for quite some time. It’s really nice to see some actual follow through on the moves that we’re trading, be able to lock up some really nice profit today. So let’s take some time and break down this morning’s trade on A&F.

All right, good morning guys. Time for a recap of this morning’s trade on A&F. Ended up being a pretty solid trade. We didn’t get as much continuation as we would have liked to see, but the price action’s definitely better today and much more tradable than it’s been over the past several weeks. That’s just simply because we had a big move down on the market and it’s moved out of the range bound trading that we’ve seen, which brings some volatility. And volatility brings volume and typically some follow through momentum. That’s where we had today on a number of names.

So let’s take some time, I’m going to break down this morning’s trade. I traded A&F, locked up just under 4,000 on it the first about 30 minutes of the day. A pretty decent trade, again. Could have gotten a little bit more out of it if it had continued through the pocket, which we’ll talk about, but I’m not going to complain with that. It’s a very healthy number and really only one more trade away from the short week being a fantastic one. So let’s break down the trade here.

You’ll see, so this is A&F now, big level at $20 on this. We had talked about this this morning in the premarket watch that definitely to keep $20 on watch, big critical level on the stock. This thing had earnings and let’s gapping lower and it was gapping below or right into a pretty critical pivot on the market. And you can see here this $20 level that provided some support, some range bound action before taking off. So being that it was a whole number, it was $20 bucks, we wanted to keep it on watch.

Then below that you really didn’t have much in the line of support until you get down here around $17. So the fact that we broke down below some major trend lines, as you can see here, some former ascending support, some former ascending resistance, broke through that, broke through all the major moving averages. The market was gapping substantially lower after a follow through move from yesterday. We had some good alignment here potentially could this into a really nice moving trade.

These are the technicals that we had. Again, nice pivot in through here and the next most obvious pivot is going to be down here near $17. So those are levels that we had.

One other thing that I talk quite a bit about is the premarket pattern. This is something that’s really important, something to really pay attention to is when you have the proper premarket pattern. We had that today on A&F. You can see it’s a gap down and we have lower highs into the open and we’re starting to open right at a very critical level. Those items are really telling into what the followup is going to be like, very predictable. So the fact that we had that and we had the technicals behind it, we had the market behind it, was one I wanted to watch really closely. And really the only one I had on watch for a trade out of the open.

So what happened was is once the market opened, we’ll switch to fast timeframe here. What I liked about it was you got a quick pop and it failed. That’s really important is that stock has the best chance on its first attempt out of the open to move against the prevailing trend. If it can’t do it, it typically means it’s going to continue lower in this case. But what happened here out of the open was that we opened, we popped, we tested the $20 pivot and we failed. So once I saw that I wanted to see a confirming pivot put in below that $20 level and that’s what we got right here.

Once we started to break down, actually didn’t get filled here because the stock was on a circuit breaker or an SSR role, short sale restriction, which means you can only get filled on an uptick. So shorting into a move like this can be kind of difficult. So what I did is I waited for it to consolidate again and right here around $19.50 it started consolidating. So I started adding into a position here, got filled, and then we finally broke down through that. I actually had my orders just below $19 to actually get out of the whole thing. I was just going to take the the 40 or 50 cent win once we crashed through $19. At that point I had 6,000 shares. So would’ve been a very nice win in a matter of a few seconds. But you can see it didn’t break through $19. It hit a low of $19.03 and that was a low. Didn’t actually come down and break through $19.

So I was sitting there and I said all right, well I’ve got a good cushion on the trade. Let’s just see if we come back and we test the [VWAP 00:05:37] or we make a low or high and maybe it’ll add back into the trade.

You’ll notice one thing here, these price action pivots, you can see the opening low. YOu come back, you make a pivot, and then you pivot again right here. So if I draw a line through that level, you’ll see that it’s a pretty obvious spot.w hen I draw a line, you can see it very clearly. Pivoted here, broke down, came back to retest and that stayed intact over here. So once I saw that we are retesting it, failing and failing and failing it and couldn’t get above VWAP, the market was coming in on the lows. I added to the trade up here in the $19.50s.

Once I did that, we started to turn over, volume started coming in. I liked what I saw on the market. I liked what I saw on this rejection. So I added more and more and more. I kept adding thousand share blocks. I added a few more right as we were coming to break 19 and we got the break. So my average actually ended up staying about the same, high $19.30s. I think it was $19.37 at that point. So once we cracked through $19 I just marketed out half right away. Got filled, $18.94, $18.95. Took more on the dip to $18.80s. Then I sat tight with the rest of the trade. We started to drift lower, we couldn’t make lows right here. We tried, but we kind of double bottomed and that was a point in the market where we started to push above VWAP. I’ll show you that in a second.

But what happened here is basically double bottom. We couldn’t break the low. The market was rounding back out. So I took more off at $18.90s, had a small position left as we started to retest $19 and I said, all right, well, we’ve doubled bottomed. If we break the last relative high, which is now going to be this and we hold $19 I’m just going to get out of the balance of the trade and lock up what we have for today.

So what happened was is we started consolidating around $19, we were holding, started to pivot above that and as we pivoted above and took out this last relative high, I marketed out the rest of the trade and locked up the the full amount of $3,900.

So definitely a good trade. Was looking for a little bit more continuation but this market bounce right here initially, if you look, kind of killed momentum, at least for the time being. But this roundup through the spy here is where I ended up stopping out. Now it’s coming back in on the lows, back through the 200 day moving average, really no support on this until $275.50 again. But as far as A&F goes, that’s kind of what helped me make my decision to exit the trade.

You can see now, it is trying to continue to break lows again. We’re almost sitting at a quadruple bottom now, but if that breaks, there’s no reason why this thing couldn’t fill this pocket all the way down to just below $17. So worth keeping a watch into the afternoon, especially if the market really starts to sell. Plenty of room for this thing to run and it’s a very weak stock. All the pops are being sold, as you can see. Even with the initial market attempt to push higher, this thing never showed any sign of a rebound. So very week stock, was able to pull some out of it today, so happy with that, especially since the action’s been quite unfavorable. But that was A&F.

The other one we had on watch was Goose. This one worked out really, really well. I didn’t trade this one because I was busy in A&F with a our position. But our watch on this was to get below $38.25 that was the big support zone on this stock. If it got below that, we talked about seeing a pretty decent move to the downside and you can see it’s just a really nice tradable high volume trend, which is always nice to see. But you look at the daily on this, you’ll see we had a big macro support zone just around between $38 and $40. Big swing, low pivot right here. We also had this pivot in through the $38.25 level.

So I don’t typically like to take a position into a heavy support or resistance zone. I’d just much rather wait for it to clear and then I’ll take a position. That’s why we put this on the watch below $38. In fact, $38.25. If that level got taken out, then I’d look for a big move into the pocket. You can see what it’s doing here so far is once it made that initial move out of the gate, nice consolidation around the level resolution. It’s just been on a really beautiful trend here since then.

So another really great trade. If you didn’t trade A&F, this one was a really nice one to take as well and it’s still continuing trend. I can easily see this thing going much lower in the afternoon as well. So we’ll keep this on watch after lunch into the end of the day.

But what to take away from today is the nice action. We had the spy selloff into yesterday afternoon. We closed below the critical pivot at $281.20 and we followed through. That’s not something we’ve seen lately. Usually what’s been happening is that once we get these moves, we gap back in the other direction making for very, very choppy action. So the fact that we got some follow through today tells us that the price action is much more tradable. And as you can see across the board, the stocks that are moving have made really nice moves. AMD, another really nice one we talked about this morning below $28.85. Below this $28.85 level, that was the spot we talked about. Look at the sell through the level, come back, retest literally to the penny and then fade again.

So a lot of opportunity out there today. When this stuff shows up you really got to put the pedal to the metal and take advantage of the action because we’re coming in to summer and it’s definitely not going to be as consistent as we’ve been used to. So when these types of days do present themselves it’s really important to be aggressive.

So that’s the recap for today guys. We’re back here first thing tomorrow morning.

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