Warrior Trading Blog

Time To Go $PLAY! +$4.4K | Mike’s Trade Recap

Mike_6.12

Hey, what’s up guys? Well, this probably looks familiar to you. It’s because I’m here up in Ross’s office, a great day of trading today, up 4,400 bucks on one single stock. Really nice to have that in the first 45 minutes of the day. We came into the market this morning, was definitely looking a little bit slow, wasn’t expecting much action, and the one stock popped up, was able to get a really nice entry and locked up over 4,400 bucks. So stick with me and let’s break down today’s trade in the recap.

All right. Good morning guys. We’re gonna go ahead and do a recap here of this morning’s action, was definitely a pretty good day. We traded PLAY, P-L-A-Y and we locked up just over 4,000, 4,400 bucks. Really nice way to come into the morning here and get a really nice trade. Yesterday was pretty slow. And Monday, I was out, I was traveling. But today I was able to jump on and take advantage of the action on the mobile setup.

So let’s talk a little bit about the setup that we had on PLAY itself and walk you through how we traded it. All right. So I’m taking a look here at PLAY gap down this morning. This was a really nice gap down earnings. Cut the forecast. So that’s always good news for the short side of the trade, right? No one wants to be invested in a company or own a stock where the company’s cutting the outlook, right? Because if they’re cutting the outlook, that means the upcoming quarters are probably not going to be that great. So who wants to hold the stock through those times? Right? And that’s kind of the psychology behind that type of news. And those are the ones that I really like trading the most and PLAY was one of them. And we also happen to have a really nice technical setup come along with it.

So if we look at the daily, so we’re gapping down your this morning, somewhere in around the 43 mark. If we look in the daily chart on PLAY, you’ll see that we have basically a pivot in through 43. It’s essentially a double bottom pivot, a short term pivot that you can see it was put in over in through December of 18, or a little bit of a double bottom here. And since then it’s been off those levels but definitely want to pay attention to those swing points in the market because they will provide significant points of support and resistance to work off of.

So that was the first spot I had. The next one that came into play as far as a pivot point was down here around 38 and we haven’t yet got to that but could definitely see the stock moving to that point before the day is out or even in the coming days. And it’s the same situation. You’ve got a double bottom. This is a little bit bigger of a double bottom. It’s a little bit more of a macro double bottom, but it is definitely a very significant level to pay attention to in the market. And that was really the next major support point after we broke this macro trend line.

All right, so you can see that I have a macro trend line beginning back in February of 16. Major swing points in the market, right? Always look left on the charts to try to find those. If you look at PLAY, you’ll see that I’m basically starting with the most major swing point on the downside as opposed to starting over here at the open because of, or I’m sorry, the IPO point because if we started here, we wouldn’t get aligned that would line up to where today’s price action was.

So I gotta move forward a little bit and I use this anchor point right here as the beginning, and then I just moved to the next most major swing in the market, which was over here in December of, I’m sorry, in the middle of 18. Connected that, extended that line out. That gave us a very significant trend line to pay attention to. You’ll see here in a minute when I switched over how we got caught up around that line, but those trendlines are very important. The macro ones are definitely something to pay close attention to because they will typically always provide a point in time where you can work off those for your level. So those levels that we had below 43 was basically what I was looking at on the stock. And then if we broke down through the trend line, that’s when it, I expected it to really start opening up.

All right, so back to the intro day timeframe. You can see here, this is the five minute, but you can see we gap down right to the pivot, right? We gapped down right to that 43 pivot, virtually glued to it here, all free market. And then a little bit of a dip this morning and we caught support on this trend line. This is the macro trend line. And what happened here out in the open, the plan was that if we were to sell below 43, I would look to take a short on this. And I was waiting for it to get to below view app but the problem was is that below view app and the distance of the trend line was kind of close. So I didn’t want to short into support and get whipped out of it on a retest. So I decided to wait and if we move to a faster timeframe, I can show you the entry that I took.

But this was the opening move, right? The opening sale, I was waiting for it to get below view app and at this point I considered on taking a trade. But again I didn’t want to short into the support. So I said, all right, I’m going to sit tight for a moment. Let’s see if we hit the trend line and what we do there. And if we pop back up and get a retest and fail and start to turn back over, at that point, I probably will try a trade. So if we look at this in real time, this was basically what I was seeing. We were testing the trendline, we were bouncing back off of it, started to get a little bit of a failure and as we started to roll over here, this is where I took the trade. So as we were coming down through 41.90’s, got filled in through 41.80’s and I was anticipating the breakdown through the trendline into the big pocket.

And we started to work right? We took out the lowest, took out the trend line, started to look really good and a little bit of a retest there at lower high, no problem. And we fade it, right? We had a nice move down. I took off some as we moved down through 41.50’s and 40’s and held in through here again. We were retesting the trend line from the underside, which is a really good sign. And I took more off as we punched through those lows through 41.40. And then we got this kind of, this hard whipsaw move and I stopped out as close to my breakeven as possible, but I did get some slippage, gained back a little bit of profit there and then I sat tight with it. I wanted to see, you know, how this stock would rack around VWAP if potentially we would have another opportunity to re-enter this after some consolidation.

And what happened was as we started to reject off that VWAP, we basically gave back that whole move, which is a good sign. But I didn’t want to get in there. That I wanted to wait for a retest again. And so the retest started to come and a little bit of a lower high here, wasn’t convinced yet because we were still holding that trend line. We were back above it and we were holding it after a higher low. So what I do at this point is if we have a higher low, I’m going to put in a speed line. All right, so now I have a speed line. So really what I’m going to wait for now is that speed line to break because that’s telling me it’s breaking the higher low trend or the uptrend, right? So what happened was I waited, I waited, I waited. And one thing that I saw here that we had a lower high put in and then we started a roll back over.

So now I was ready, had my hand on the trigger. I was waiting for the speed line to break. Once we started to break, that’s where I would look to take the entry. So as we continue forward, start to come back below the trendline and then I saw some volume come in right here, right? Look at the volume at the bottom, right. You see the volume on this candle right here, how it spikes significantly higher than with the volume relative to it before it was doing, right. Haven’t had that much volume in the uptrend. But then we get this big spike in volume as we’re selling back through the trend line. So once I saw that, I started to hit the button to get short. All right? So I got short in through 40.60’s, 40.50’s. We got the break of the trend line, looked really good.

And then once we broke lows, I added again. All right, so I added in through here and now I have my position. Now I was comfortable because we did make loads, we’re continuing, the market was starting to pull, everything looked good. The volume was coming in on the sell, right? The volume was coming in through the trigger, which is always what you want to see. And then I started covering some as we move through 41, that was my first cover through 41 had a little bit of a retest. We retested the pivot in through here. So if you fall align at the base of where we were basically rejecting initially, 41.40’s, you can see we came back up and retested that, we failed, we turned back over, took some more off as we move through lows here. And then I held it, held it, held it, we retested again. Or as long as you stay below the pivots and lower highs, you’re okay and 40.60 hit. I took more off there and then the balance I took off as we crashed down through 40 just a few minutes ago and called it a day.

So really nice trade here on this. You really can’t ask for much better price action. Technical setup looked great. Traded really well. Volume was good. All the signals were good on entry. It’s really picture perfect. I mean I couldn’t have really asked for any more of a better setup. So good job. You guys are able to catch a trade on this. I’m going to wrap up the day with that and we’ll be back at it first thing tomorrow morning.

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