Warrior Trading Blog

Wednesday Winner on $AAPL +$5.8K! | Mike’s Trade Recap


Hey, what’s up guys? A great morning of trading here on an Apple earnings report. Right out of the open, we’re able to lock up 5,800 bucks on a huge momentum trade to the long side as Apple started moving on some serious momentum right after the bell rang. So really great day of trading, the action has been either hit or miss. It’s completely either on or off. And that’s why it’s really important on the days that it’s off to keep those losers really small, like yesterday when I lost 300 bucks. When a trade just wasn’t working, I decided to get out, because I know that when a trade is working, it should be moving almost immediately, like today on Apple, and then when we have days like today, be really aggressive and we’re able to lock up those home run trades. So good job everyone that was able to catch a piece of it. Let’s take some time and break it down in the recap.

All right, good morning guys. Time for a recap of today’s action. And it was a pretty good one here with an Apple earnings play, locking up just over 5,800 bucks to the long side into a huge momentum and volume move. Had some really great technicals on it today, a really great setup and everything came into alignment and allowed us to become aggressive and a capture that move that took place.

So let’s break this down and talk a little bit about how this actually played out. Now, Apple, big gap higher here on the earnings report and it was coming into a very major pivot at this 216.80 level. All right, so if we look at the daily chart, this 216.80 level comes from a bit a ways back in time here in late 2018. you can kind of see it created this pivot point around this 216.80 level.

But once it broke below that and held below, you started to get a really hard pull on this into the end of 2018. But that’s where this pivot had come from, 216.80’s. So we had that as a first level and the next level above that was 223. Doesn’t look like a big pocket here, but it is a sizable pocket, about seven points or so. And that was the next level of resistance. So we had good room to move, and then above that brings us to the recent highs.

So that’s where we got the technicals on this. Again, this 216.80 pivot from this base that was put in back here. And then this pivot in through 223 that was a spot that we were watching. So back to the five minute here, which you can see in the pre-market what was happening is we had the big gap up, just kind of drifting sideways and we were sticking right at this 216.80 level.

And this is really important because when we’re looking to trade a stock out of the open, we ideally want it to open at or very close to a significant support or resistance level. And the reason for this is, is that it becomes much more predictable on what the move will be. If you open mid-range in through here, the probability is skewed in that it could pop up first or it could fade first. So it’s a lot harder to predict the move, which comes with more risk.

Whereas if we open at or near a significant support or resistance level, we can get a lot higher predictability. And again, that brings lower risk. So being that we opened up right at this 216.80 pivot, there was a good chance that this thing was going to make a directional move right away. Whether it was going to be to the downside as a gap fade or to the upside as a long, we had to wait and see the first minute or so of price action to determine that. But once the direction is confirmed, it’s likely to make that big momentum move. Which is exactly what happened on Apple today once it opened.

All right, so now that we have our levels that we plotted out, 216.80, 223 to the upside for resistance, and 210.64 for the downside for support, we knew that this trade could move either way, so it offered a lot of potential and those are the stocks that you want to watch, especially something like Apple, it’s high profile, it’s going to provide a lot of liquidity. So let’s dial into the fast time frame and look at our actual trades on this.

So coming into the open, we knew that we were kind of drifting lower here and initially, it looked like the gap fade might be the play that we want to look at. But what happened is at the open, we let the initial reaction take place and it quickly spiked up really hard. And you got kind of this whipsaw action here. You did have pre-market highs that we plotted out at 218.50, which was right here. So we wanted those pre-market highs plotted out. And remember we don’t take a trade into pre-market highs, we want to wait for the confirmation to take place over pre-market highs before we actually initiate the trade.

So what happened here is you could see several times, we get rejected off at 218.50 level. We never close above it until this candle comes in right here around 933. All right, so once we get above it, we start to close above it, right? But we want to see a back test and hold. You want to see it confirm that level. And that’s the only point in time that we know that the stock has confirmed its strength and now is the time to actually take a trade on it.

All right, so what I saw on this is we got the back test, we got the hold, we started to get real high and tight here and consolidate. I took the long as we were pushing through 218.80 and I initially saw a little bit of a volume spike come in as we’re resolving up off of that. So I took a position there at 218.80 and I added as we broke 219, and then I held it. I held that position and we started to move really nicely here. Got a nice spike up right away. I sold some as we came up through 219.60’s and 70’s. We got pullback and typically I’d add on a pullback. As you guys have probably seen, I like to add on those quick pulls, but the market was completely against the trade and if I have the market, if the market is not in alignment, I really don’t look to add into my position this far away because it’s tough to see a momentum continuation, especially if the market is just completely against you.

So instead of adding, I just held my position through the pullback to see if it would actually hold and work, and then look what happens down here. Look at this volume ramp, this volume profile, this pullback, and then you start to see the volume ramp up. And I knew that as soon as we started, we’re coming into 220 and you had this volume start ramping up here. If you look at it in real time, this is basically what you were seeing like this, see that volume ramping up and you’re coming into 220, that was a really good look with room above. Really, really great technical setup here. So that’s how I knew that we were definitely going to push higher again.

And so I sat with it and I waited for us to break through 220. You got that huge volume push, blasted it right to 221. I sold more at a two 220.60’s and 70’s. And then as we were struggling up here, just over 221 as we were coming back through 221, I sold the balance right at 221 as we were breaking through it. So I took my balance off up near 221, and then from there the trade pull back consolidated and that was it for the long side.

So again, we captured this momentum move by simply waiting until a pivot was put in the direction of the trade, in the direction we were looking for it to move. Get above the resistance. We close, we pull back, we pivot and we get long. We get long when the volume starts to ramp in. That’s where you really make the money. All right, so really nice technical setup on this. Nice follow through. Nice continuation. And again, a lot of volume, can be really aggressive on this. And these are the stocks that you really can make a lot of money on if you size up into the volume that’s being traded.

So really good trade there on Apple. It’s definitely good to see this action while we’re in this relatively slow time in the markets. The action’s been kind of completely on or completely off. We have days where there’s nothing and then we have days like today where there’s really good stuff taking place, but you just have to be ready to take them when they do present themselves.

Now, Apple did have one more trade on it. I didn’t take this because I was at where I wanted to be for the day, but we were watching this below 218.50 for the fade. All right, 218.50 for the fade was the trade that I was telling the room to keep your eye on that level. If we start to fade through that, that’s going to be the next most cleanest trade because you’ve got a nice pocket down towards 217 so you can see what happens here on 218.50, you get a bunch of first test, never short, never go into it on the first test.

Second test, third test happens, and look what happens in the volume down there. We start to pick up, volume starts to pick up on the break. You’re short 218.50 you get a nice move just above 217. So that was the next cleanest trade that we had, but two good, very tradable opportunities on Apple today for good profits if you’re able to capture at least one of them. I captured the long, there was a trade to the short side that the room caught. But I sat tight after the first trade on the day and have since sat tight into the afternoon.

So good job on Apple. Good job reading the volume profiles, good job reading the technicals. And again guys, when this stuff aligns, when all our criteria are met, this is what happens, right? It’s really important to wait for those that come into play because those are the ones that are going to provide the big home run trades. All right, so everyone have a great rest of your day and afternoon and evening and we’ll see you back here first thing tomorrow morning.

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