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Warrior Trading Blog

Time for the Weekend with +$6.6K | Mike’s Trade Recap

Mike_7.26

Hey what’s up guys. Wrapping up the week here on an incredible note with another really solid trade for just over 6,000 bucks on Twitter to the long side on their earnings report this morning. So we were done about the first 15 minutes and we are wrapping up the week here again on a really solid green note, and out to enjoy the weekend. So let’s take a few minutes and break down today’s trade in recap.

All right, good morning guys. Time for a recap of this morning’s action. And wrapping up the week here on a really strong note. We’ve had some really good action this week as we moved through some earnings. But I’m able to come into the end of the week and end the day up 66 hundred bucks on trade on Twitter. It’s been a relatively slow summer until about the last week here we’ve seen some action really pick up, momentum pick up, volumes pick up. That’s really the biggest thing. We’ve seen the volumes pick up as we’ve come into this earnings season here. But thankful because it has been quite slow but when that action does present itself it really is important to become as aggressive as you possibly can.

And that’s what we’ve done the last few days here, to look up some nice winds. I just want to take some time and break this down for you because again, there are some really good, teachable, technical moments, this Twitter trade that I had. So let’s spend a few minutes here, just a quick recap of the trade. Always good to go back and take a look at the action that took place so you can understand what allowed this thing to move so well.

Now one thing on Twitter is I’m definitely, usually pretty cautious on this name because of the fact that it gets a lot of attention. And a lot of attention can sometimes mean you get what is often referred to as a crowded stock. It’s hard to get it to move because there are so many people trying to do different things. However, when you have a proper technical set up on it, you have room to move, and you have a volume there, it’s likely that you actually see a more fluid move. And that’s what we had today and Twitter. Now realizing that the move on Twitter was not going to be the biggest one if it did move, we have to be a little bit quicker on our outs. But there was a set up here that allowed us to take a trade on it.

So let’s talk about the levels that we had on the daily chart. First of, you always want to use the swing high pivots, swing low pivots, the biggest moves in the markets to start with your support resistance. And if we look back, the first swing I see to the upside is going to be this one right here, which is this pivot high at essentially 41. If I look back from that, we’ve got a recent gap fill point that comes at 42.14. Beyond that, there’s a few other levels, some descending resistance that it broke today. So that’s good right. It’s got some momentum to the upside. But you’ve also got some ascending resistance. Remember, ascending resistance is the most difficult to break in that you need the most volume to actually successfully break and hold, okay?

So starting with the shock value of the gap down, right, right here, on July 27th, almost a year ago today, we start with the shock value of the gap on the down side, and we connect that to the next most major swing point in the market, which was this 40.97 pivot. Now that happened to correlate with this spot right here, the gap fill at 42.14. So what does that right here? That’s what we refer to as a confluence point. A confluence point is a point in time where you have more than one point of support or resistance. So in this case it’s a confluence point with resistance. You’ve got two or more points of resistance. One in the form of a macro trend line, one in the form of a gap fill point. Okay, so heavy resistance. Gets above that and holds, then it has room to really push higher, probably back up towards the recent highs.

So what I liked about this trade today is you had been kind of coiling back up here. The market was pushing higher. And this is a decent pivot in the market. So that alone, if it broke that, it had about a point to move. Now on Twitter that’s roughly two percent. That’s about the bare minimum I’m going to look for to take a trade. And I typically wouldn’t really even consider two percent to take a trade. But the only reason I did consider Twitter was because I knew there was going to be good liquidity. Everyone’s watching it. It’s going to be a stock that’s going to trade a ton of volume. I can trade a ton of size on this thing, virtually as much as I want. And I’m not really going to experience any liquidity issues.

So knowing that, and we have about a one point’s worth of room, I can take a pretty heavy position and get a really nice momentum move to the upside, a short burst of momentum, and probably lock in some good profit. At least that was my thought process here on the morning. So again, what I was looking at is that if we opened and we started to push through 41 and we held, I was going to try to take this thing up towards 42, right. Somewhere up near 42. Basically try to fill this pocket up to the next resistance.

So what we did is we waited for the market to open. I’m going to switch to my fast time frame and I’ll show you the action that occurred once the bell rang, and where and why we got in. So bell opened, always want to sit out the first minute or two to see what the action looks like. Being that it’s Twitter I expected some indecisiveness, some whip saw action until it decides on the direction it wants to go. And even if it decided to go up, I wasn’t going to anticipate going long into this pivot. Just don’t do that on the first test. If it pulls back and sets up, and coils up, and there’s volume, then I will anticipate on the second test for the break. So it’s important that you just don’t anticipate on the first test because this is the type of stuff that could happen. Hit the big push, hard fail. Big push, hard fail. You don’t want to anticipate on the first one. And only you can anticipate if you have volume and it has to be on the second one. At least the second one. The second push into the level.

So we can see here we get the first move to the upside. It’s starting to look interesting. Good, good volume coming in. There’s definitely some strength to it that’s coming. So I’m watching this pretty closely. We move to the next bar. We’re whipsawing around. Approach that 41 level. It’s not really ready yet. Remember, what I want to do is I want to see a pivot be put in above that level. That’s really critical. You have to have a pivot put in above that level for confirmation. Unless you have some real extreme volume, you have a set up that you want to anticipate because it’s held support, it’s held a higher low. You can do that. It’s a little bit more advanced. It requires a little bit more of experience in being able to read the tape. But generally speaking, we’re going to wait for a pivot. That’s 90% of what we’re doing.

So here we have Twitter, it’s putting in a pivot, but remember what I said, I don’t anticipate on the first test of the level. The level has to actually be tested, okay. That’s what’s considered a first test. So here’s a first test to level 41, and you reject. Reject it pretty hard. You pull back in, so now I’m starting to watching this pretty closely. Because if this starts to hold the higher low, or at least hold the VWAP, which is that white dash line, I’m going to look for a potential anticipation trade, especially if the volume starts cranking back up. So as we move further into the open here, start to see we’re holding a little bit of support, starting to look interesting. I see that volume greatly dying off down here. Right? Look at this volume greatly dying off as we’re consolidating.

All right. Next bar. We’re kind of selling the VWAP a little bit. But again, the volume is still pretty light relative to that opening push. Still very, very low relative to the opening push, which means the buyers are outrunning the sellers. All right. So I’m still watching this. Hold the VWAP, volume dies even more. All right. Look at the volume dying even more as we’re holding the VWAP. So now we start looking as if we’re going to round back up. I start to see a little something, a little bit interesting on the volume profile. Looks like we’re coming back a little bit, off the VWAP, so this starts to look interesting. And I’m thinking, as we’re pushing through 40.80, if we can get a big volume spike going through that level, I can probably start taking a trade and anticipate that breakthrough of 41 and start selling into the [MOO 00:08:57].

All right. So as we’re moving, there’s the break of 40.80. And we started to see the volume is continuing to rise. So being that I saw that happening, I started to get long in the position. As we were approaching 40.80, my fill was actually 40.77, it took two big blocks, and as soon as we pushed through 41, I sold some … 41.20, right there, as a pushed through that, I sold more at 41.50, and just a minute here, you can see, here’s a pivot being put above a level. So let’s say you didn’t actually anticipate this trade, you wanted to wait for a pivot on your trade. So here again, look at the pull back. Pull backs happening. Look at the volume. It’s dying, it’s decreasing, it’s declining, it’s what you want to see. Now you’re kind of looking this, maybe about 41.40 is your next look if the volume starts to pour in.

Right? There you go, look at the volume there. Ramps back up as you push through the highs. You’re anticipating that as it’s breaking, 41.30s, 41.40s is your entry, and you start to push. I sold more as we pushed through 41.60s, which was just a few bars away here, consolidated, and there we broke the highs. I sold more in through 48.60s, or 41.60s. And then I cut the balance off. I was truly trying to get to 42, but we were starting to get a little bit further into the open here, 15 or 20 minutes, and momentum typically starts subsiding pretty quick at that point. And being that we had that heavy level of resistance up here on 42, I took it once we hit 41.80, which was right there. So I sold it all, the balance of it at 41.80, that I had left. And then I was done with the trade, I was all out.

And at that point, just consolidated. Did make another run later, a little bit later into the morning here, but right in through here, it ran up to 42.40. So still a good trade here, there’s a volume wrap on that too, right here, volume spike as you broke through. I just wouldn’t go long into this, I would wait for a pivot about it. It never really did that. So I’m happy with the trade we got. We read the volume profile. We got a really good entry, anticipated it. The market was in our favor. Market out in the open for the first 15 minutes was moving up, was definitely in our favor, so that helped lift the trade as well. Market alignment is really important, especially on these high profile stocks.

So good, good trade there. Again, wrapping up on a really nice note. So happy about that and we’ll come back at it next week. But, show you the other trade we had on watch. All the trades we had on watch today moved really well. The Starbucks, if you are interested in those opening quick moves for scalps, we had this one on watch below 96 for a gap fade. We had it on watch below this level right here. And you can see that once we broke 96, you got a nice move on this, just a real quick straight down move. Definitely some profit potential there. There just wasn’t nearly as much volume on this as Twitter. And I’m just always following the volume, right. Always following the volume.

Although, this made a really nice move and it actually did have a good volume profile if you look at it relative to what it was doing. High volume on the open sell, low volume pull back. Pull back for a short is obviously a relief move back up. Low volume pull back, when it breaks, look what happens to the volume. Volume spike, that’s your signal that the move is starting to go, and there’s the move that you get.

  1. GT. Big move on this for this stock. We’re looking at below this critical support level right here. You can see, put a pivot in right at the support level. Right? Broke right below 13.23, you’re entering 13.20s, 13.15 or so, and then a hard move down. Hard move down into this pocket. Really nice move there. You get about 30 or 40 cents of move at least on a 12, 13 dollar stock. That’s a big, big move. So nice move on that one.

And just a couple others out there. This YMDX, right out of the gates, moved really well. Really nice pivot was put in on this. If you look at this trade, the long on this was about 41, so as we got above 41, look what happens. Beautiful pivot put in above 41. There’s your retest and hold. Look at the volume profile. Look at the volume profile dying into the pull back, and look what happens on the ramp up, this bar right here. Volume spike higher than the last relative volume as it dives into the pull back. You start to break, you’re long at 41.10s, 41.20s, and just a really solid move up.

So good, good trades here today. A lot of action, good volumes. And that’s what we look for in the first 20, 30 minutes of the day. But anyway guys, got to head out, enjoy the weekend. And we’ll be back here first thing Monday morning.

Hey everyone, thanks for watching the videos. I’ll continue to make sure that all of the watch list as well as the recaps are available to all of you. Make sure you subscribe to keep up to date on what’s hot and what’s not in the market.