Without much going on with earnings plays lately, I have been using the Radar a lot more on the open than usual. Typically I wait until my ideas for the open have played out, then I’ll scan through the Radar around 10:45 – 11:00 am. Recently a lot of my ideas don’t really move on the open, so if I don’t see the volume/volatility I expected, I’ll go straight to the SMB Radar. Today I noticed PNC at the top of the IPR list right on the open. After watching it trade for around 20 minutes, I took note of a few things.

Recent support on the daily was 58.14 and prior days low was 57.56. Stock has been in a clear downtrend since the beginning of the month. It opened and held below both levels.

PNC dropped on a morning drive – failing around 57.30 and finally bouncing near 56.00. To me, the play at this point was to look for areas to short the bounce for a reversal. I also noted that the market was rallying towards resistance/pivot point at the time, so only looked to short it as financials were lagging the rally and should be the most vulnerable to any down move.

Here is how I entered the trade:

There was clear buying around 57.00 while PNC was still bouncing. Once it finally moved away from 57.00 it sprayed up to 20c and couldn’t hold higher. On the way down 10c held the offer, then 57.00 held the offer. This is the best way to get in as everyone who bought around 57.00 and higher is now trapped and should fuel the move lower if PNC holds below 57.00. This happened as there were little to no upticks on the way down besides vwap and near 56.00.

Feel free to ask any questions on this trade or on the SMB Radar in the comment section or on twitter @smbcapital