Warrior Trading Blog

Large Cap Market Analysis | Arsh’s Trade Recap

large cap

How’s it going, Traders? My name is Arsh and I’m one of the mentors here in the Warrior Trading community. I wanted to quickly make this recap video for you guys to go over a handful of names on my watch list to show you guys why I find them to be interesting names to keep on close watch and also to help you guys get an understanding of how it is that I analyze the markets on a day to day basis.

 

So being a large cap index and stocks trader, I always like to keep a close eye on the SPY, which is the ETF that tracks the S&P500. Now the S&P500 has been in a sustained uptrend for many months. And actually this is a trend that has been going on for many years before it was slightly stopped by this correction that took place back in February. However, we’ve now resumed that uptrend and we’re back at all time highs. So keeping that in mind, I have developed this bullish mentality currently where I’m looking to buy stocks that are exhibiting breakout patterns and one of those stocks has been AMD.

AMD has been in a very sustained uptrend and as a day trader, I like to look for patterns that are going to help me identify potential upside breakouts. Now I want to share one that actually took place just a few days ago that I was able to share with members at our inner circle program that took place in Orlando, Florida last week. So, AND, as you guys saw on the daily chart, was in a very sustained uptrend. Now when I saw this sharp up move of a few candles and they’re sideways consolidation, that gave me an insight into what may happen next. I had a feeling that there was going to be a continuation of this breakout through this consolidation.

Now, when I see these types of consolidation patterns, I like to mark off the trend lines of the upper boundaries of the price action to help me visualize a breakout point. Now, I was able to mark off this trend line using the highest point here and the next highest point on this red candle here, and knowing that, I know exactly where the breakout points should land with this trendline.

So my expectation is that past this consolidation, we should begin seeing a significant upside breakout and it was really nice to see just how well AND broke out that date. We had a significant upside breakout through this bull flag pattern. Essentially this was a one, two, three move, where we have a significant move for a few candles. Then we have the sideways consolidation where we find some resistance from sellers, but once that resistance is broken and the consolidation is broken, that’s when the buy pressure really resumes and you can see the stock resumed its uptrend.

So these are just one of the patterns that I like to look for in the markets on a day to day basis. Now, AND is definitely being kept on close watch because it is very actively traded now that it has gone through such a significant break out on the daily chart.

Now we actually saw another bull flag-like pattern roughly right here where we saw this up move before the sideways consolidation. Then as you guys can see if we mark off another trend line here, we have roughly another breakout point that landed at 3187 and from that point, the stock decided to make it move all the way up to 33. So definitely a great name to keep on your watch list and I’m going to be keeping a close watch for trades in these next few coming days and weeks. Make sure to join us in the chat room if you already aren’t a member to be alerted to any trades I’m going to be taking.

Tesla was actually a very active name today. If you guys don’t know, there was a report that came out that the SEC was going to be probing tesla for their tweet that they made a few weeks ago regarding going private. So because of that, the stock actually tanked intraday from $300 or so all the way down to this 277 level.

Now I want to mark off some very incredible subordination and resistance levels that came into play today, which were the 29142 and 27718 levels. So if you look here on the daily chart, the 29142 level actually was the previous all time high for this stock. So all the way back here in 2014, this was the all time high price for the stock. And now that we’re back in that price range, I have it plotted on my chart because it’s definitely going to be a valid level of support and resistance.

And as we can see here on the five minute chart, we had this huge red candle that made them move through that level. And on this following candle, we actually tested that 29142 as resistance. So that ended up being a very strong level of resistance from where Tesla crashed for another roughly 25 points or so. Or sorry, about 15 points or so. And it turned out to be a very valid level of resistance today for day traders.

Now on the other end of the spectrum, we had this 27718 level as support. So if we look here on the daily chart, that level came from the low of this candle here. This was a level that we tested as support on a few occasions here, here, and here. So when I see this type of action revolving around a support level, then I definitely want to keep it on close watch in case we ever test that level again because it’s likely going to be a valid level of support and resistance.

Now, if we see here on the five minute chart, we actually bounced right off of that 27718 level for a few points. We came back, tested it, once again we bounced significantly off of that level. So that goes to show you the importance of these major support and resistance levels that we can identify on the daily chart. They’ve definitely come into play on the intraday chart from time to time. And they can lead to some very remarkable trades if you have them identified and plotted on your charts. So any trader who was able to identify these levels and was able to take a trade around them, I’m sure was rewarded handsomely today.

So some of the other things I’ve been watching include Square, Roku, who the stock has been in a sharp uptrend lately, now that we’ve broke it out of the previous all time high of $58. So, we gapped up here on earnings, found some resistance, consolidated sideways and a bull flag pattern. And then as soon as we broke out of this consolidation, that’s when the uptrend really resumed. So I’ve been keeping the stock on close watch to take a long day trade or swing trade if I find any significant technical patterns. Right now, we are pretty extended to the upside so I’m not sure if I’m going to be taking a trade on it anytime soon, but if in case there is some technical patterns such as a bull flag, I’ll be keeping a close watch to potentially trade it.

Some of the other names on my watch list include Tilray. This is one of the marijuana stocks that’s been going absolutely nuts slightly. As you can see here on the daily chart, just a few months ago or just back here in August, the stock was roughly around $25 and now we’re all the way up to $155 and this is definitely a parabolic rally for this stock. And I do believe it’s going to come to an end because these types of moves cannot be sustained. However, how long it’s going to keep going before it does a reverse is really is anybody’s guess. I will be keeping a close watch for any kind of technical patterns that tell me it’s ready for a sell off, such as a bear flag breakdown or a flat bottom break down, just some of the patterns that I look forward to the short side.

Aside from that, I have a few other names down here that I’ve been keeping a close watch, MRO, this is a stock that has been consolidating sideways and a bull flag pattern and back here, we took a long trade on it that turned out to the remarkable trade. For my options, I believe I made around 255% on a single day and I didn’t want to take it long again, as we move past this trendline, unfortunately I wasn’t able to grab that entry, but it is nice to see that once again, this trendline break out is helping this stock to have another significant upside breakout. So these are the types of patterns I look for on a day to day basis to help me identify day trades and swing trades in the market.

So I’ll go ahead and actually finish it off with M, which is a stock that I’m watching for a potential short. What we’re seeing here is M had a significant uptrend for a few months and we had earnings come out on this day were they gapped down sharply and reversed the previous day’s up move and essentially crashed from that rally higher and now we’ve kind of consolidated in this bear flag pattern and essentially a flat bottom of breakdown pattern.

So what I’m thinking here is that if M can get back below $35, then there’s a good chance we can see a breakdown to the downside, maybe 34 down to 33, maybe even down to this 200 moving average. So I’m going to be keeping it on close watch for a potential breakdown of this consolidation that is formed. It might go tomorrow, it might go in a few days, but I’m definitely keeping it under close watch for when it does decide to begin making a move through this $35 level for a short.

Alright guys, I’ll go ahead and wrap it up there and I hope to see you guys in the Warrior Trading chat room. Have a great day everyone.

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 anytime I go live or upload new videos. Until then, happy surfing.