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The Chop Continues: Red Day Trade Recap -$350

chop continues

All right, what’s up, everyone? Wanted to do a recap here of the last few days worth of trades and the action that we’ve seen. I’ve been out for a few days at the end of last week and returned Monday. Been trying to get the week started strong, but we just haven’t really seen much momentum.

 

As you can see it’s reflected in today’s trade as well. I’m down 348 bucks on HRB. Again, just total chop. You can see how this stock just didn’t really do much more than it did in the pre-market.

Usually we see some follow through with significant moves like this, but unfortunately it got kinda chopped out and took a loss for 348. Again, it’s a relatively small loss, but when I decided to cut it loose and say, “All right, I don’t see this stock really having any potential now that it didn’t start to work,” I just call it a day, no reason to trade past that.

I didn’t see really any favorable action. So I just decided to keep the loss relatively small, call it a day and wait for tomorrow to come. But let’s break down this trade first and then we’ll look back at a Tuesday and Monday. So HRB, this stock usually trades relatively well when it gets moving. As you can see how it did here in the after hours yesterday. Once it starts going, it actually moves well.

It can move with some speed and some force and in a very clean manner. And we dropped right to the support here around 2375. And it just didn’t want to break through the pre-market. We started to put in this basing pattern, which we always take caution when we see that because that tells us that there’s a big support level there and we need to wait for that level to actually clear before taking a position.

And what I liked about it was this pocket from 2375 down to the gap entry of roughly 22. If you look at the daily chart here, you can see there’s a gap that falls right here, back in March of 2017, right at 2216, gap fills down here at basically 21. So there was some good potential if this thing started to open up to really start fading and put in a gap fill move, and that’s what we were looking for.

But it just ended up holding that pivot and didn’t really want to break down through it. The trade that I took was, as the market was opening, we started to get this push higher, failed push higher ,little bit of a price action pivot going on in through this 2450 area. You can see that it had tested it several times in through here, a second time, a third time and out of the open a fourth time. When I saw that hit reject and start to pull is when I got short.

I got short just below 24. And it closed below view app, looked really good. Second five minute candle started to close below the pivot, looked even better. Plenty of room for this thing to fade and give us a real nice trade on a low price stock. And it just ended up turning back around, closing back over V-wap. And I just decided, “You know what? The fade didn’t hold, this could be a false break set up.”

The market was kind of choppy so it wasn’t getting any help there. And I just said, “All right, I’m just going to cut it loose.” So I cut it loose for just over 30 cents. Now the nice thing about it is I only had a starter position. I had just over a thousand shares on this I lost just over thirty cents. So it really wasn’t that bad.

My normal size on something like this would be closer to 3 or 4 thousand. But I just was trying to get the trade started to see if we could get some continuation, then I would have added to it if we started to move down through the lows down through here, 2330’s and 2320’s.

But unfortunately as soon as we hit, we flashed through that opening low. We got bought right back up and that’s the reason I decided to stop out. So 30 cent loss just over 30 cents a thousand shares. Again, it’s relatively minimal damage and easy enough to get back in another trade.

So I just decided to leave this one be. Thankfully I did. I didn’t try to trade it a number of other times just because the action was shut off here almost instantaneously. And when you have a stock that has a significant move like this and doesn’t get any continuation in the first 10, 15, 20 minutes, you should be extremely cautious because these are the names that ended up chopping out and if that momentum doesn’t come early, then it’s not likely to come any later.

So that’s why we just decided to cut loose HRB and not really look at it again. So that was the only trade of today. We touched on a couple of the High Beta names in the watch list for swing trades. They actually turned out to be pretty incredible day trades. Take a look at Nvidia today. This thing really opened up nicely. We were talking about this setup here on the daily.

It’s nice little pull back consolidation bull flag setting up in through here, and it started to open up out of the opening bell and retested that top side of the flag and really ripped higher. So nice move on that one. Netflix virtually the same exact move here. If you look at the daily, again, nice pullback in consolidation, breaking out of this very nice bull flag here.

Can see what happened out of the open, a quick sell down to that flag, retest hold, gets bought back up. And then just an incredible move higher. So that’s what we were talking about this morning on these for swing trades, but it actually turned out to be really nice day trades and I know a lot of traders in the room actually were aggressive enough to take advantage of these.

So good job to you guys because this really made a nice move today. So Netflix playing out well. Apple had a decent setup for a swing, but it’s kind of given back some ground now, back above this 194 level. We were kind of talking about maybe watch it if the market continues, however, the market is moving a little bit lower right now. We just had the Fed minutes reported and they’re raising rates again. So that’s having an effect on, on these, uh, these higher priced stocks.

So that was really it for today. Yesterday we had this RH on watch. I actually tried to go short on it out of the open. We had a really perfect gap fade set up with this complex trend line, this purple line that we have here.

If you look at the daily chart, very, very long term complex trend line that had respected for a number of years. And then once it broke, it retested and faded really hard from roughly 95 bucks down here near 25. So big move after it broke through that complex trendline. It was a heavy level of support.

And yesterday we were coming back to interact with that line again. And in the pre-market, you saw how it actually was interacting with it early. It had been stopped just below that line, twice, three times, and at the open we started to have what we really like to see for a gap fade.

So if we’re looking at this in real time, this sort of move right here is exactly what you want to see for a gap fade setup. This is where I got sure, just above 144. I got short after this candle closed at short, at 144. 90 was fill.

Had a relatively decent fill. Looked good. It started to close below the V-wap. Just start to break in through the 20. We had plenty of room for this thing to fade and I actually did get a nice move out of it initially because it sold out. I was able to cover some down through here, 140 to 60’s and 70’s. So from my initial fill of 14490, a decent little profit there. But then it popped right back up. I had to stop out, break even on that piece. I actually tried it again somewhere right in through here.

I think it was this candle again when it looked like it was going to fade and it popped back up. I gave some back on that one and then it just decided to really rocket higher and closed back above that trend line. And then thereafter made a really nice move. I didn’t flip long on it. I had already taken two trades. One worked, the next one didn’t, so I ended up flat on the name.

And it looked like it was going to be choppy and it ended up going higher and I just didn’t end up flipping long because I didn’t really like the action I was seeing. So I wasn’t able to participate in that move to the long side. But it’s nice to see that that trendline was respected once it got back above and moved higher. So again, I know a lot of traders in our room, were able to capture this when they saw that it had tested that trendline from the top side, held, and then started to move higher.

So again, plenty of opportunities if you’re extremely patient. We’re just not seeing much momentum and follow through across a number of names. It’s very specific and you really have to be watching that one in order to capture the move. So that was RH yesterday. Just didn’t work out for me. And then on Monday, we were watching this PCG, and I liked what we saw to the short side on this.

If you looked right here, nice pattern in the open. Now, this is a drifting pattern. This is what we like to see because this tells us that it’s extremely weak. If you really have no pops taking place, then that’s telling you there’s a lot of selling going on. It’s extremely weak. There’s probably a much better opportunity for a continuation to the short side. And we liked it, but we wanted to see it start to break down through this 3750 area, 3730’s.

We had some support and through here that was relatively heavy and it needed to break down in order for us to get short. So I actually didn’t take a trade on Monday because that never got through that level, but it ended up bouncing off of it. So if you look at the daily on it, some nice ascending support lines on this stock that it definitely tested and respected longterm lines. You can see PCG here, longterm, ascending support.

And there’s one line, there’s a second line, they kind of intersect right at the same spot and that’s why that level was such a big level of support because you had those longterm lines intersecting at the same spot. Otherwise known as a point of confluence. You have those points of confluence that usually is going to be a big reaction to one side or the other.

Now what happened out of the open was it, right before the open, it tested it twice, it started to bounce, and the short sided play was no longer there. So I decided to sit tight and it made a nice little move to the upside if you were able to capture that.

But the plan for us was to go short after it broke down through that support because when major support breaks, you can expect some acceleration and that’s what we’re looking for to get into this pocket from 37 down to 35 and capture that move. But just didn’t go that way.

So we decided to sit tight and Monday was no trades and so yeah. Then we move into Tuesday was RH, got chopped out on that one, was a flat day. And then today on HRB, again, kind of chopped out just due to the market action, kept it relatively small.

But that’s okay. We can come back from that. Nothing we can’t recapture in one trade and make that a couple times over. So it’s just been choppy. We’re starting to move into summer. Can expect these summer doldrums to start to kick in. The decline in volumes will have an effect. So you definitely have to be a little bit more patient and much more selective, and only be aggressive on those ones that provide a really clear cut set up. All right, so that’ll do it for today guys. Small loss 348. We will see you guys back here first thing tomorrow.

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