Warrior Trading Blog

Ending The Week Strong! +$2.7K | Mike’s Trade Recap

mike_7.19

Happy Friday, guys. We are wrapping up the week on a really strong note. Up just over $2700 bucks after what’s been a really solid week of trading for me. Definitely a few really good wins on some good momentum names. Could be a factor of the earnings this time of year giving us a little bit of movement through what’s normally a slow summer, which it has been. But, this week the action’s picked up a little bit, so hopefully we can see that carryover just a little bit in the next week, because trading this momentum sure makes this a lot more fun. But, to wrap up the week, let’s take a few minutes and break down today’s trade.

All right, good morning, guys. Time to do a quick recap of this morning’s action on a Friday. I’m definitely ending the week on a nice note here, up just over $2700 bucks. Was up quite a bit more earlier in the morning, but I added back a few times and price action on Microsoft was a little bit tough. But, I was still able to lock in a nice day and end the week on a strong note. So lets take a few minutes, I want to break this down for you guys. A couple cool things happened on Microsoft here, which is interesting. First off being these ascending trend lines. Now, ascending resistance, if you are present in the room, in a large cap trading room, you guys know that ascending resistance trend lines are the most difficult to break. When you have stocks moving into ascending trend lines, you need extreme volume for the stock to actually push through and hold. But, if they do, the flip side is if they do break and they hold, you’re going to see a huge move.

All right, so here is Microsoft, here are the ascending trend lines that we had. Again, a little bit one that’s a little bit longer term here, that comes back a couple years. Then, a shorter term one, that comes into play and it correlates around 142. Now, the fact that we have two lines correlating, or confluence point, definitely … And, being that they’re ascending resistance too, that is heavy resistance, and that’s definitely going to weigh on the stock. All right. Definitely don’t want to go long into a move like that. Again, you don’t want to go short and [inaudible 00:02:24], or long and resistance. So what I was waiting for is that if we did get above this, and we broke on volume, I was really interested in this making a nice move higher into this pocket. A lot of potential up in here, which was basically from 142s up to roughly 152. So definitely a big move in store, if that actually broke through on volume. But, it didn’t, and we went to the short side when we saw that it was failing.

If you move into the intraday target, we can see earnings print after hours yesterday, a little bit of a slow grind higher. Here’s these ascending resistance lines that came into play. You can kind of see, once you made the move up here, you kind of flat lined, you weren’t really moving in much of a directional way, just kind of sideways. Then, once you get closer to the open, you had this big rejection right here, you had this pivot, this kind of pre-market pivot in through 13950. What I liked about it, is you didn’t have anything really in the way from 13950 down to the 20 moving average. So big pocket here. About roughly four points or so, definitely a move that we could make some money on if it actually ended up moving with momentum. So that’s what I liked about it. We had the overhead resistance weighing on it. We had, again, this nice pocket. We also had the spy of the markets sitting back at that critical level that we were talking about, that 29960. So as we started to fail this, we weren’t really getting much movement to the upside. Look at the by volume as we opened it. It’s just very low and not much urgency there to move higher. So that aligning with Microsoft fading, started to look really nice.

So how did I trade it? Well, if we’re back to the intraday chart here, we go to the fast timeframe, and we take a look at the open. I actually got short this thing as we were starting to break this pre-market pit. So what happens is on the open, we’ll just walk through this kind of candle by candle here. I’ll show you want I saw and what I was thinking. So as you get the open, kind of get this big test and sell, and immediately you start to take out the low. It starts to look good, but remember, we don’t short in the support. We want to see at least some consolidation and increasing volume, because that will tell me that the weakness is probably going to be sustained, and maybe able to take a position as we’re breaking through support.

All right, so as we start to progress here a little bit further into the open, still no real pivot that’s been put in as a sign to where we could potentially take a tray. As we progress further, here we go, there’s basically the retest, 13960. We test the level, it tries to move up here a little bit. When I see this starting to occur, I see a little bit of a retest and pop, this essentially could be the pivot. Sometimes these pivots happen extremely fast, you got to be able to recognize them and act on them. When you’re able to do that, you can get these precision entries. So once I see this green candle form, I’m thinking, “Okay, well, this could definitely be the pivot. If it starts to turn back over from here, this is a point in time where I can probably anticipate the breakdown, because the pop is really nothing substantial.

All right, so next candle. We see a little bit more of a pop, but then we see a pull back in. All right, we see a pull back in. Now, again, this is essentially forming a pivot. If we start to approach the low of that pivot candle, that’s where I’ll look to take the tray, which happens to align with the critical support point. So we start to come in, right there. Right at this point right here, as we start to break down, I got short of 13960 is where I actually got filled. So 13960 got filled, cracked through the level, looked really good, plenty of room to run. Another pivot right here. I start to add on when we have the next resolution. So I take a position to start the position, now I’m full sized. All right, now I’m full sized. I’m full sized on this, and now I’m going to look for my first exit, which was around 139. We come all the way down, I get out as we break through 13910, take off half a position.

Now, I’m sitting tight, kind of waiting, watching. Will this give me another opportunity to add? We’ll have to see, kind of sit with it. It is due for probably a longer retest at this point, so I don’t want to jump the gun. Then, as we move forward morning, here we go. We come right back, we retest the pivot, this is what I was talking about a little bit of a longer term retest, or pullback, if you will. So here you test it, and as soon as I saw that this was starting to fail, we turned back over. Right here I added back the piece I took off. I added back the piece I took off, which started to come back towards lows. I put my orders out again, same place, 13910. We come back down, I got filled a little bit there as we broke down near the lows, and then we started to come back up here.

This is where I added again, because we had a lower high pivot. Looked pretty good, looked like we could essentially break down, the market started breaking down through the pivot. We came down through, we were able to cover some in the 90s. 13892, I believe is where I got filled. Started to come back down there, it looked pretty good. Then, I was considering adding again, as we came, I believe it was right here, kind of consolidating near this low to see if we could get another break down, or another momentum push. This is where I was up close to $5000, but I added back, which brought my average kind of way down here. Then, I got this spike. I was trying to hold on and see if we would reject this. But, when I saw that we weren’t, and I saw that I’d given back a few thousand, I said, “You know what? I’m going to just cut it lose here, and we’ll have to just wait and see if it sets up again.” So I got out there, 13955, started to come back in.

Then, as we broke this right here, 13910 is where I got short one last time, to see if we could break down, started to look okay. Started to break through, started to look good. We just sprung right back off the lows there. I didn’t like the price action, again, because we were kind of bottoming. You’ll see we’re kind of bottoming over here. I just cut it lose as we kind of came back up and started to move back through my break even point. I did get back a few hundred dollars there. At that point, I had given back about half of what I initially had been up on the stock in the morning. So when that happens, I shut it down. That’s how I ended the day, $2700.

This is kind of an odd trading stock today. The price action was not the greatest, because what was going on here is that every time you tested the low, you would spring right back off of it. Low, spring back off. You kind of went back up, came back down again. You can see over here. When we tested the low, and we broke through the low, sprung right back off. It was tough. We didn’t get any sort of hard momentum. It was definitely a more difficult stock to trade, especially if you were trading a little bit of a size, because these spring off the lows can definitely hurt you if you’re trying to get the momentum to continue, like it was out of the open. But, that just wasn’t happening today in this stock. Thankfully, we were able to still lock up a really nice day, and the week on a nice green note, and call it a week.

But, it did end up grinding a little bit lower, really not too much. It’s kind of a slow, grinding stock. But, every time you hit those lows, you kind of bounce a little bit, and it’s not that urgency of selling. So that’s why I gave it three opportunities because we had a nice pocket, the market was in alignment. But, after that, I just saw that it wasn’t really ready to make that momentum move, and it’s a Friday. Ending the week on a green note, and it’s just time to lock it up and come back first thing next week.

That was Microsoft, the other one I had on watch today, another decent name that moved was CRWD. Now, the only reason I didn’t trade this is because it’s a recent IPO. We have recent IPOs, I didn’t really have any levels to work with. That’s typically why I don’t trade these when they’re in this type of range, because I don’t have levels to work with, means it’s a lot less predictable for me. If it is a lot less predictable, that means that there’s likely a little bit more risk that comes with it. So I chose to stick with a little bit less risk today, since it’s a Friday, and it’s been a strong week for me. I didn’t end up trading this CRWD. But, you can see, really nice gap [inaudible 00:11:14] set up here. You put in a high just after 8:00 AM, kind of drifting lower highs into the open. Then, out of the open you see that hard selling, really good look on the fast timeframe. You can see here, just literally right out of the open you get that hard crack, you’re in, and you get a really nice move. I mean, almost … If you trade in this right, you should’ve gotten at least three or four points of movement. So nice, nice move there. Good, good trade if you’re able to catch that momentum out of the open.

Anyway, guys, we will wrap it up there for the week, and be back first thing Monday morning.

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