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Warrior Trading Blog

Mike’s Trade Recap: $CAG One and Done!

one and done

All right, good afternoon guys. Well, time to catch up here and talk a little bit about the trades that we’ve taken over the past several days, including today’s trade on CAG, which turned out really well.

 

Now, yesterday and Monday, we got chopped out of Apple. Tried to trade that on a technical breakdown, and it just didn’t work. We got stopped out of both of them.

Just kind of been a choppy last few days, but today, we’re able to get a hold of this CAG and really make it worth our while, and that’s the beauty of this strategy is that when a setup does present itself, we can really get aggressive and make up several days of our profits and as well as any losses that you may have incurred.

Let’s first start with a trade that we took on Monday with Apple. Now, Monday, we had Apple sitting right at a really nice point of support. At this 183.50 level. Now, remember we traded this back on the 19th and we’ve got a really nice trade on it as it broke down through this 186 pivot. 186 was very strong support, and we started to break that out of the open.

We got short right here, and we covered right down to the critical support level at 183.50. This trade worked out really nicely, filled that pocket just as we wanted to, and respected this support and resistance level, so the plan worked out very nicely.

Now, being that we have these critical resistance and critical support levels identified on Apple, we were watching how I was trading around that, and come … let’s see, yesterday. Or Monday. We had a setup here that I liked, being that we were gapping below the 183.50. So remember how hard we bounced off that 183.50 last week, and on this day right here, early in the morning, we were gapping below it and rejecting it.

So I liked what I saw in the pre-market, we were now below the significant support level, which should act as a resistance. And what happened was, as it popped up out of the open, I waited, I sat tight, and as we started to crack below VWAP here, I got short.

Right at 184, anticipating the breakdown, the market was rolling pretty hard, and I wanted to see this 183.50 give way and it really opened up to the downside. Now, as I started to see the close below VWAP happen, I started to add into my position. I started to add heavy. Alright. And I had a pretty sizable position, and I was up very nicely when we tapped 183.

I took a little bit of the position off at 183.10, and then we just started to chop out sideways. And on this candle right here, at 10.10, I started to say, this looks good. I’m gonna add again. Alright.

I added again right here, trying to anticipate the breakdown. The market was breaking down, all the high-beta tech names were really fading hard. And Apple was the only lagger so I was anticipating that this would just catch up and we’d start to fade this pocket pretty nicely. Now, what happened was, is, I started adding into this move and then we started to chop back out again.

Popped up to 184, I said you know what, this thing’s obviously just chopping sideways, I’m just gonna stop out of it and be done for the day. Because it doesn’t really look like this thing’s going to move. So I stopped out at 10:30, 10:35 I stopped out. Okay, and I actually ended up slightly green, but it wasn’t anywhere near what I was expecting to get on this trade, so it didn’t really turn out to be that great of a day.

But at the same time, I did miss this move right here, literally five minutes later, it started to resolve lower, hit lows and then it just took off. Alright, exactly what we want it to do.

So I got kinda caught up in this chop and I didn’t really give it enough opportunity and I was a little bit frustrated but, I just decided to cut it lose. ‘Cause typically when you see a stock not reacting to the market especially when you have a volatile move like we did, and you see this chop out action, most of the time, it’s probably not going to resolve.

Alright, and being that that’s what I’d normally see I just decided to get out of the trade, I didn’t want to be part of the chop, and just call it a day. Unfortunately I jumped out five minutes too early and it decided to move on. And that’s okay, but that’s what Monday ended up turning out to be, just kind of a chop out day.

So, that was Monday, and then we move into Tuesday, and again, I kinda liked what I saw here on Apple, we were retesting the 183.50 level again. And what I liked about this, was that, the market looked a little bit weak out of the open, we had rejected the 183 pivot nicely, we started to come up into the open, out of the first five minute candle.

We were below view at, below the 20, we were below this sort of recent trendline on the five minute. We tapped that 183 50 level to the penny, pulled off it hard, and I got short as I started to see that rejection. And it started to look like it was gonna reject again, I added again at 183.40’s and it just kinda popped through and blew me out.

Alright so, the resistance didn’t hold, it popped back through that, and I said, you know what, I’m just gonna call it a day, I got out of the trade, took a little bit of a loss on that. And said it’s just time to call it a day.

The technical side of Apple is not really working, and one of the other things that we have to note on this, is there wasn’t a direct catalyst. We were just trying to trade a technical breakdown, albeit it was a very strong technical level, the trade just didn’t work.

The important thing is, if I look back at this and ask myself would I trade this setup again? And the answer is absolutely yes. Because it was such a strong technical setup. We knew this 183 50 level was strong and we were below the view app in 20, we made a big rejection, the market started to pull a little bit out of the open and we had alignment.

And I would take it again. Unfortunately it just didn’t work out, but that’s trading, right, nothing is 100%. So yesterday was a loss and then coming into today, we were able to bounce back real nicely here. I was able to get a really nice trade on the CAG and something about this CAG that I have it sort of at the back burner of my watch list, because I had a conference call at 9:30.

And that’s something that I typically stay far away from when a conference call is going on. Just because it’s completely unknown risk, it’s something that I can’t control. And all it takes is someone to say something, that people dislike on the call, and the stock can whip around in one direction or the other. So it’s just something that as a trader you have zero control over. So I decide to stay away from those, until those conference calls are normally complete.

But, today what happened here, something very significant was, as the market opened, the first five minutes, I was just watching it, kinda rejected the 100 day moving average. It started to pull right here, and I noticed that we were getting a ton of volume coming in, but the price wasn’t moving up.

It was just kind of hovering just below this 100 day. And it started to actually pull back a little bit, while this volume was coming in. And we were holding below this 100 day and if we got below this 200 day, likelihood is, is that we would flush. Like we talked about in our morning watch list, so. That was a plan if it got below 200, when it gets short.

Now I saw something happen a little bit earlier, like I was saying with the volume pouring in, but the price not moving up. And I said you know what, I’m gonna take a stab at this thing, because there’s a ton of volume coming in here and the price isn’t moving up, typically that’s a signal that it’s gonna go the other way.

So I got short, at 36.60, anticipating the breakdown, I added several times, as we broke through VWAP in 20, added again as we approached the 200 day, added again as we broke the 200 day, and then I covered some as we broke through 36 at 35.90. I covered more at 36 60. And I’m actually still in a third of the position, I was trying to hold out to see if this 35 level gets hit or I’m out at 36.

So I have this trade bracketed whichever hits first, is what will take me out of the trade, the remainder of my position, whatever happens, it’s gonna be still a very, very green nice day.

That takes care of the week, and we’ll end today very nicely as well as the week if we don’t trade again. But we will definitely look to trade again tomorrow and the next day, in the event that we have a stock with a catalyst.

Something that sets up technically, we’ll definitely look to jump on it, but this CAG worked out really nicely. And that’s something that you really have to pay close attention to is the volume.

Break, I’m a big, big proponent of volume, you need to definitely be able to read volume profiles, watch how volume comes in around support and resistance levels. ‘Cause that’s gonna tell you the strength or the weakness of that level and it’s a very, very good insight as to what you can expect from the price action.

So lesson today is, definitely keep a close eye on those volume profiles, I talk a lot about it in my course, I talk a lot about it in our mentor sessions. And I work closely with all of our students talking about volume and making sure they understand it. Because it is a very key part of understanding market direction.

Alright, so CAG worked out really we. Nice one and done trade here, we’re still in a portion of it, again the trade is bracketed so whatever happens first, if 36 hits, or if 35 hits, that’s what will take me out.

At this point it’s probably looking like 36 hits, since it spaced out. But again, that’s okay, you always have to try to hold a piece for that back of the mine target ’cause those are the trades that really make you a lot of money, and this one, it definitely could still fade. Right, it’s holding below VWAP quite nicely, the market’s weak, this could easily roll over in the last hour of trading and really turn out the day to be nice.

So that’ll wrap it for last few days of trade recaps here, I wanted to catch up with everyone and let everyone know what we’re trading, how we’re doing, but we’ll see you guys back here, first thing tomorrow morning.

Oh hey, I didn’t see you there, 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.