Warrior Trading Blog

Back in Action! +$3.2K on $ADSK | Mike’s Trade Recap


Hey. What’s up guys. So I’m ending the day nicely in the green here by just over $3,000 on a trade this morning after no trades on both Monday and Tuesday. It’s definitely been a little bit slower for the trades in large caps, but it’s important to remain patient and just wait for those obvious opportunities to present themselves. And that’s the point in time when you become aggressive and it makes trading much more simple. So let’s take a few minutes and break down today’s trade in the recap.

All right. Good afternoon guys. Time for the recap here of this morning’s action. We actually had a pretty decent day, nothing too substantial, but a green day nonetheless. A solid green day, just over $3,000 on ADSK. Now I didn’t take a trade on Monday, I didn’t take a trade on Tuesday. It’s been some rather slow action for large caps, really not much to choose from. And I just tend to sit tight when that happens because I just really like to wait for the obvious, easy money to be put in front of me and that’s where I’ll become aggressive.

Now this morning on ADSK we actually had a pretty decent setup on this and I was looking for a big continuation move. And I tried to get it and I got a little bit out of it, got stopped out on about half of the position, but we were able to lock up a decent trade, actually two trades on this that we’ll talk about. So, decent green day, just over $3,200 on ADSK. Now what we had on this this morning was as strong gap down. We were breaking a pretty significant trend line here, a rather short term, but it was well established in that it started down over here from this last relative low pivot. All right, this last relative low pivot, which also correlated with this macro pivot in through here around $120 that’s been a big level on this stock.

So I use this as my initial anchor point and use this recent consolidation in through here as my second anchor point. You can see when I extend that line out we get a nice following of the trend over the last several session. So we knew this line was well established, it was important. If we broke that we’d probably see lower. And then we start to get into this pocket here, which goes from $137.50s down towards the macro pivot of $120. Now the reason I use this a pivot here is because I looked closely on this and you can see there’s a bunch of price action in here that was telling me that this was a decent level in the past. You could see all these days that you ran into this level. And once you were able to confirm above it and go, it really made a nice move. So usually I don’t get this micro on a stock, but the fact that we had all these days that were hitting up against this level here I wanted to be aware of it at least.

So basically $137.50s down to $120, that was what I was looking for. Now coming into the open we started to setup really nicely. We had a little bit of a pre-market low that I was kind of keeping an eye on and through this $132 level, somewhere in through right there. And what I wanted to see is a move below that before I started to get short. Because you obviously had a base in through here and that was something that you got to be careful of because those tend to catch support every once in a while. When they do, they like to run. But I like to wait until they break the low and hold the low before I start to take a trade.

So if you look at the fast time frame on this you’ll see that at the open we had an initial move up, a relief move, which is okay. That’s what we want to see because that tells us that the stock is weak, if it fails its initial move up, starts to turn over. These sometimes work out to be some of the best continuation trades because it’s telling you right away that the move is really weak to that one side, and it’s likely going to pick up to the other. So what I liked on this, again, was that failed move up. We started to break below VWAP. We got below that pre-market low zone.

And this candle right here was really important, it’s a rather tight range candle. But once we started to resolve out of that, right down through the low right there, $137.40s and 50s, I started to get short. And I got filled at $131.30s, 40s. I think I got filled some in $131.20s too, but kind of all over the place. Had a little bit of a spread on it. Then we got a nice move right away down to $130. So a good point and a half right away, covered in through that move. A little bit of a relief move here, turned back over, broke down through $130. And then it reclaimed $130 really quickly and that’s something I want to spend a moment on here as to how to identify these important technical signals that will ultimately help you determine whether or not the trend is still in effect or if the move has actually been exhausted.

So what I typically do on a situation like this is that if I see a stock that breaks a level and reclaims it right away, right there I’m on high alert. So if I see this happen, we break, we reclaim it right away, now I’m on high alert. I’m going to watch this really closely, because if it makes a higher low I’m likely to stop out of this, and that’s exactly what happened here. We pulled back. I gave it a chance to break again, it didn’t, it made a higher low, and as we started to come back up through $130.70 is where I stopped out because the price action was essentially showing you that the trend had been exhausted, since we reclaimed that level so quick.

So whenever you see that happen, if you see the price action move through a level, reclaim really quickly, right there you should be on high alert. The next step is that if it makes a higher low, in the case of a short sided trade, if it makes a higher low you really want to be exiting your trade or trimming a substantial part of it.

From there it made a run up and then I was stopped out of the balance of that trade. And then we came over a little bit later in the morning and I saw that his move right here, that we didn’t break the highs. Notice we came up here, we didn’t break the highs, we were rolling back over. And I wanted to keep this on watch because if you broke back below this $132 level I could see it getting back towards the low again, which there’s a trade to be had right there. So what I did is as it started to break down through this level here, I got short at $132.20s, $132.30s, and I looked for a move lower.

Now what happened was is you got a little bit of a retracement here, but I’m okay with this because it was still in trend, it was still making a lower high. It was only about .70 away from my average, which is okay. I had a much smaller position here, this is much later in the morning and I was just waiting to see if we could get something started, and if so I would add to it. So making the lower high here, started to come back in, break below, had a little bit of a move here right, and I covered some in through this level, about half as we came down through this $130, $140 level. Got a nice little bit of a move there towards $131. But then what happened was is we bounced off $131, and look what happened again. We bounce up, we make a higher low, we start to trend back higher, and I got out again. I got out. Then from there the stock ended up making a pretty substantial move higher throughout the rest of the day.

So, again, we had to fight for some price action in through here to be in our favor. It definitely was not the cleanest move by any means, but we had to fight it out a little bit to try to get some profit out of today. But that’s okay. It’s still that time of year where it’s a little bit slower. You can’t expect as much volume and volatility, and that’s just something you have to work around. So decent trade today. We’re coming towards the end of the month here and just a couple more trades will put us nicely in the green. Anyway, good trade today guys. We’ll be back at it first thing tomorrow.

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