Had a nice few days out in St. Thomas last week!
Couldn’t have asked for better weather. The big action continued last week – lots of De-SPAC names going crazy into circuits and recent failed IPOs getting volume at lows, trapping and pushing hard.
There have been some great multi-day moves in this market which is great to see. Longevity in moves creates more moves. If things just gap up and fade every day momentum dies. Recognize names that are holding oddly well, those are the ones that sneak up for rounds 2 and 3.
I think what we dived into last week on the video should have helped a lot this week – the concepts I went over on the screen share.
I’d say the biggest takeaway this week was being able to identify the trap as quickly as we did on a name like AI – what were the signs? How to see it that fast? How to recognize edge vs. stuck in a channel and fighting off that ‘urge’ to nail it again after the first flush. We applied the same concept to KALA late day – once again, flushes/soaks without any exhaustion moves = bait bait bait for higher. Respect it!
$AI used to be the type you'd get paid huge on that first trade and think you have a good read on it and then proceed to give it back through the day.
This type of move used to sneak up on me all the time – hence the reminder/warning earlier. Now every flush traders don't want… https://t.co/HfhXLeTDK7
— Nathan Michaud (@InvestorsLive) March 3, 2023
Lots of earnings movers lately, so my game plan is going to be a bit different for the week ahead until things change. As you know, I prefer LIQUIDITY > thin, crazy volume, low float, easily circuit halt type names. Trades like RIVN on Friday fade into close is my sorta trade. I added a few recent earnings plays and movers with good range that I am going to focus on for edge towards the bottom of the scan. My goal would be to trend join 945-10AM+ vs. VWAP (either direction) or watch for them to blow off and some sorta exhaustion move to take advantage of.
Have a trader friend’s wedding coming up at the end of this week in Vail, so I’ll miss the desk Thursday and Friday. I’ve never actually been out west to ski before, so I am super excited to check it out.
We have some new moderators in the community, and more webinars and value add coming.
I hope you have ALL done a deep dive into all the scanners we now offer – Max is doing an AMAZING job. The custom HOD/LOD list coupled with the alerts when they go bananas has really been adding some great watches throughout the day. Adding the audio is even better!
Our CP deal will end soon. Check it out here if you haven’t already.
Twitter Questions
(Answered in video below)
How do you identify short tramps or over staying in your positio ? AMAM got me went under $5 and rebound.
— Enrique. (@barbadillomx) March 4, 2023
Exit strategy when trade works out, what you see on chart or tape that makes you think the trade is finished. Also related how not to get shaken out before full move has happened. Thanks
— Eoghan Carroll (@EoghanC11) March 4, 2023
How you differentiate between a fail and a bear trap? See $AI on Friday.
— Johnny (@trk_johnny) March 4, 2023
When the short looks obvious, you do still get in small/ caution. Or do you wait for the crowd to get pushed out and enter full size then? I.e CYTO
— William Gregory (@Hitjuice97) March 4, 2023
Video Scan and Game Plan
Stocks to Watch
AI ideally gaps up $30-32 blow off and then sit back. I would be cautious getting TOO biased in any one direction after Tuesday/Wednesday you never know if this current market (SPY) squeezes out and then sits back we could have gap and fade like TWLO DKNG etc about two weeks ago. A great example of a key level getting blown out flushing big time only to reclaim and trap everyone in it’s path who tried to anticipate the next big flush. We talked about the soak under $25s (dip and rip candles) and suggested to stay far away from the short side after the first big nail. If you got run over – I would take the time to review this trade, review the warnings and discussion on what to look out for to avoid falling into this trap. Like KALA into close, each flush candle just acts like a trap if it gets soaked after and the only edge = blow out/exhaustion move. Same thing with AI. Slow steady firm trend = no edge BUT shorts stay there because it just slowly sneaks and they think they’ll have another shot to scale in.
SI bigggggg trade on Friday – killer levels and thought process and yes I sold maybe a bit too soon $5.90-6 about 20 minutes later it was $6.20-6.30 + but that said had I not sold on that first move I likely would have sold the same spot anyway. In my eyes that was the dead cat bounce and squeeze followed by pressure again so I want to be really cautious with coming in with a bias on Monday – I think this will be a great reactive trade or
TRKA so far it’s been a super friendly trader every good ramp has been a great entry point for the fade — but they keep defending .50-.51. To me .51 was the key level but psychologically I think .50 will be the spot that flushes it. I love the way it’s trading the better it holds the better the unwind will be later. Once .50 stays heavy I’d look for a fade .38-.40 pretty quickly before fading back off to mid to low .30s.
RIVN great trade off the headline Friday – looking for more action like that to take advantage of since it has big moves and great volume. This will be same concept for the “Range Watches” below – pretty much an extension of this idea.
Failed Follow Through:
OBSV pretty nice move on Friday I figured it could fade all day and never look back. Midday it started to flat line, ramp but kept exhausting out meanwhile they were soaking same spot every time. That’s when you saw me cover the first batch because I re-evaluated bias vs. price action. Started to ramp back up and hold at VWAP so locked most so that I could without emotion re position as you saw into the blow off move. Covered it all at close. Likely gaps down although I am HOPEFUL for .25 + on air then fade off to .15s or lower on Monday.
BOIL monitoring for the day KOLD pops $3-4 bucks as a bounce because we should get .50-1.00 fader here. No rush but monitoring – set some price alerts.
ONCS nice one on Friday quiet fader idea. Ideally offers another spot to fade on Monday.
KALA nice squeeze out and then the S-3’s after hours makes you wonder if there was loose lips that this was coming and some ended up on the wrong side trying to front run the filings. Either way some re-sale some dilution. Like we went over in depth on Friday with all the flush/trap flush/trap etc your edge ONLY is there under $15.50 level given OR after a major exhaustion move.
Continuation:
WAVD so far so good on the big picture idea. Nothing to chase up like mad but idea was on Thursday when we saw a ton of swipes come in reminded not to chase as always but interested in dips that build. This one surely built, added more on Friday.
GAME nice break out chart no position but keeping an eye on it.
SQLT so far so good – great idea last few Sunday videos w/ the big picture idea due to the wicks.
Names With Range:
Staying Familiar:
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