Week of May 17, 2019 Day Trading
BABA – gapped down under previous days support. $8 dollar gap on this this. Definitely more than the 3 percent. Average volume is 12 million shares. Current volume is 13 million shares. Definitely higher than average, was trading a lot of shares in the morning. Typically like to see more shares traded than its average premarket but the gap on this trade was good. The pattern on the trade I recognized. A gap down with buyers coming in thinking they are getting BABA cheap in comparison to where it was trading on Friday. They only had so much buying power before sellers took over.
News – Tariffs in the market on China. China retaliated this morning with $60 billion in tariffs to start in June.
Perfect setup on this trade. When a ticker gaps down, I want the buyers to come in and try to push the stock higher. Once the buyers can no longer push the start higher, I begin to look for a reversal signal. On the 5 minute chart, the up move is more noticeable. I look at the 5 minute chart for the pattern and the 1 minute chart for the potential entry. Looking at the smaller time frame, the 1 minute chart, I start to stalk the chart for an entry. I look for an area of support that potentially can be broken and that is where I started in on the trade. Small size as BABA has the ability to move pretty quickly here. My entry was under $171.10. Once BABA traded under that area, I put on a short position and waiting for confirmation (a retest of the prior support area that was broken) that the current trend to the downside is correct.
P&L: Roughly +$160
Looking at DIS for the short. Insufficient gap on trade. SPY trading higher. The trade should have been to the upside. DIS showed considerable weakness so I waited for a point to short. This was a second day trade that I anticipated to pull in a bit because of the market weakness from yesterday. Trade happened as planned hit the resistance area twice before going the opposite direction. Risk on the trade was $1.00 so I was looking for a minimum of $1.00 move in the direction of the trade(short) ideal target would have been $2.00.
Trading plan was followed on DIS the exit should have been tighter and moved down based ont the pattern that was forming. DIS formed a double bottom and continued higher. Reversal pattern. When a double bottom forms, you are advised to take profits if the double bottom is not broken. If the bottom is forming the ticker needs to continue to break down or it is time to get out of the trade. Any holding here and taking out the middle part of the double bottom (think of a W) means the direction has change and you need to find a point to exit the trade.
5-15-2019 Day Trading
Traded BABA and A today.
BABA – no gap on the trade. Trading in a range here. Looked to get short on the range of the stock. Didn’t move the way I anticipated and stopped out for a small loss. No news on the trade or catalyst. Trading the volatility based on the overall market news. Entry was solid but the overall market tone was not. Market is positive on the day and BABA is trading with the market. No news on the ticker, no catalyst to move the stock, the gap is from it being traded on dual exchanges. Definitely not a candidate to trade with large size.
Agilent is the next ticker that I was interested in.
Agilent missed earnings and lowered revenue guidance. This could be a multi day trade if it closes near the lows of its range today. I would be looking to trade this again tomorrow. This type of trade could be considered a changing fundamentals as the company announced missed earnings and the guidance is being lowered which is a very bad thing for any company. The company can continue to fall going forward and can provide more trades on the short side.
I initiated the trade on the pullback to the lower side which is the same pattern I’ve traded in the past. A gap down with a move up to get the buyers out of the trade and start to look for a reversal back down to the lows of the day. I got short under the last green candle and held through the up move as it never made a higher high. Once intraday support broke, I continued to hold for the larger move. I got an almost $1.5 dollar move out of the trade, I was looking for a more substantial move to the lows but I didn’t get it within the time that I was trading.
Average volume on A is 1.9 million. Currently it is trading roughly 10 million shares and more than 1 million shares premarket. Agilent was in play. Descending triangle pattern formed at a whole number. Traders tend to place a lot of emphasis on whole numbers($34, $35, $36) and half dollar numbers ($34.50, $35.50, $36.50). You will typically either find a lot of supply (resistance) or a lot of demand(support) at these type of levels. Agilent is down more than 10 percent which means the short sale restriction is on. If I am going to trade this tomorrow, I am looking for continuation of the move downward possibly to $62ish where there is some support on the daily chart.
P&L – $199ish
One ticker today.
Average volume: 1.06 million shares (finviz.com)
Volume traded: 19.14 million shares
Gap %age: >20%
Pattern : descending triangle short, developed after I was in trade – Initial pattern was bear flag.
So IOVA was in play. In play basically means that there are a lot of eyes watching the ticker and people are looking to either get long or short. Having fresh news makes it easier to trade the ticker.
Included are the daily and the 5 minute chart. My entry was based on the fact that it ran up huge at the open but traded immediately lower. Once the break of VWAP (volume weighted average price) I was looking for a level to get short. I waited for a retracement of a move and got short when IOVA continued to move in the direction of closing the gap. This trade took a while to develop and after some time IOVA started to form a descending triangle pattern. I was waiting for either the continuation of the descending triangle pattern to show itself or a breakout to the upside which would have stopped me out. Knowing the two outcomes that I was looking for all I did was wait for the trade to develop. Once the trade developed in my favor, I scaled out of the position slowly taking profits and almost hitting the point to where it started to reverse higher. I do not want to look at this for a second day play as it was all over the place. The opening range on the trade was approximately 2 points and once it traded below its opening range level (using the 5 minute time frame this is the 1st 5 minute candle) and trading below the VWAP, I was looking for IOVA to give me a reason to short.
5-17-2019 Day trading
this was definitely a whipsaw day trading down and then up for a total net gain on the day of $34 which is not bad. I will take a green day over a red day even if it is this small.