Warrior Trading Blog

$HAL for $550! | Mike’s Trade Recap

What’s up, guys? Start of a new week here, and thankfully because last week was incredibly choppy, really inconsistent, and tough to pull any sort of profit out of the market. And I ended the week relatively flat. Whipsaw action back and forth.

I got whipped out of a couple large cap names. They were just trading very, very different than what we normally see here. And a lot of that has to do with the summertime action. It’s just the time of year where we see these more inconsistencies in the market, and it’s definitely tougher to navigate it.

So coming into today, it’s nice to be starting a fresh week here. We talk about being a little bit more selective, a little bit more vigilant as to what’s going on in the markets, and really sitting tight and waiting for the best possible set ups to present themselves. And coming into today as well, we really didn’t have much in the line of catalysts where the stocks are moving around.

We had a nice technical breakdown on Tesla below that 300 level that worked out really well. There were a few other names moving around, but didn’t really have much in the line of a significant technical set up. And when they don’t have that, we definitely want to stay far away.

I actually traded HAL. As we were coming to the opening bell, we saw HAL hit the scan, and it was selling off coming into the open, and it had some room to run. So I watched it very closely as the market opened. I didn’t jump in right away. I waited a few minutes. I wanted to see the price action play out to make sure that the selling, it was real, and we were going to get that continuation to the downside.

And I actually traded the VWAP fade. I traded a relatively small position, but was able to capture about 50 to 75 cents of profit. Almost 600 bucks for the day. And decided to call it a day on a Monday morning. So let’s take a few minutes here to break down today’s action in the recap.

All right, guys. So let’s jump right into the recap here today. Did pretty well for a quick trade out of the open. You can see here the one trade on HAL for just over 550 bucks. A quick trade off the VWAP for a quick win of 550 to start the day. And that’s great. For a Monday morning, the first 30 minutes or so, I’m more than happy to take a quick win like that, especially when it’s just been incredibly choppy over the past several weeks.

So it’s nice to be in and out and be done with the trade. So let’s talk a little bit about this HAL. What we saw here a few minutes before the open is HAL on the scan. It started to sell off here pretty hard as we were coming into the opening bell.

And I quickly jumped over to the daily chart and noticed that we were actually breaking down through this significant pivot point here right around 44 bucks. And we had room all the way down until the next pivot around 41. So that’s a three point move on a $44 stock. It’s a pretty decent move. And especially on Halliburton, something that trades with a lot of volume.

There is a lot of eyes on this stock, so when you have these big macro setups resolve, we typically will see a violent move. And that’s what we want, because as day traders, we’re looking for those violent moves to take place because that’s profit potential.

So when I saw this macro setup start to resolve, I really liked what I saw, and I said, “All right, let’s watch this out of the open and see what kind of price action we get. If it starts to setup, we’ll look to take a trade on it. But not until we start to confirm that there is some follow through, because that’s what’s been lacking over the past several weeks.” And again, it’s summertime. This is somewhat normal.

The inconsistencies, you just have to be a little bit quicker on your feet and it’s definitely going to be a touch and go type market. So you just have to recognize that and understand how to navigate around it. And typically what you have to do is be a little bit more patient. Wait for the setups to present themselves and then become aggressive once it actually is confirming.

And that’s what I did today. Normally, I’ll jump on a trade out of the open, but today, I didn’t want to do that just because I wanted to see a little bit more confirmation before jumping in. So what I did is I waited till the VWAP fade, which started to come back up here, test VWAP, and what I noticed right off the bat was that we basically had a double top against the VWAP.

So we started to test it again on this candle, and I said, “All right, well if we start to pullback down here and start to get close to 42 again, try to jump in, see if we can get the break of 42 and continuation to the lows.” Because that’s what you want to see on a VWAP fade is a move to those lows relatively quickly.

If that doesn’t happen, you should be on high alert, because it probably is consolidating for a push back through VWAP to the upside. All right so what I did is once it started to break down past 4210, I got short just over a thousand shares, and I covered some immediately once we hit the low down here through 4160. So that was a quick 50 cents.

I covered more as we broke lows again down here at 4140s. Caught a few more in through that area. And then I noticed some basing action start to take place here, and we were moving into the 11:00 o’clock hour, which starts to be the time where momentum and volume start to taper off quite a bit.

And it already had made a significant move, so I said, “You know what? Let’s just all it a day.” I covered the balance right around 4150 again, and that’s where we ended up with the 550 bucks for a quick trade on a Monday morning. So great break down here. Technical break down on this. Worked out very well. Important thing to take note of here is the VWAP fade.

Because this is a textbook one easily. And these trades are very straightforward. You definitely want to look for that rejection of VWAP. You want to look for lows to come pretty quickly after you reject that VWAP.

Again, if it doesn’t happen, then you probably want to exit. You definitely don’t want to stay longer than this pivot right here. This is the decision point. So if that level breaks after it starts to come back down, if it starts to come back up and break that, you definitely want to be out of the way.

Very clear and defined stops, that’s what makes this trade setup very easy for relatively new traders to understand. All right, so that was HAL. The next one we had on watch here was TESLA, and the reason we had it on watch was the technical breakdown below 300 bucks.

Now, couple things going on here was the short term ascending support. We also had this rising wedge. A rising wedge is where you have very close highs, same zone of highs, but higher lows. Higher lows usually tell you a stock’s consolidating for a move higher. But if it comes after a big move down, and you’re not getting any higher highs, but you’re getting higher lows, that means the sellers are stronger than the buyers, and if that breaks, then you’re going to see a violent move.

Being that we had this rising wedge set up right here at a very important level, this 309 level, that was a point of confluence. And that means that there’s more than one area or point of support resistance that meet at the same place. And that makes it even that much stronger. So we had a break down of 309, we also had a break down through this ascending support, very well-defined ascending support line.

And I liked it for a move below the $300 psych level for 297 and then down to 292, which it got pretty close right out of the open here. It started to sell and then it really broke down once it cracked 300 and sold off quite a bit down towards 293.

So I did not trade this just because I saw the potential on HAL. Much easier trader, definitely not as much range, but for a Monday morning, to be in and out, quick 550 bucks, I was more than happy with that. And I know a lot of traders are able to catch this move.

It did look nice. I was actually waiting for the retest of 300. But it never came. It kind of just cracked through and took off and wasn’t able to get an entry once it did break 300. I was waiting for a retest on a faster time frame.

But unfortunately, it didn’t come. So that’s all right. We still wrapped up the day nice and green and we’ll be back at it tomorrow. Try to close out this week real strong for the last week of July. So I hope to see all of you guys back here first thing tomorrow morning.