Yesterday in YUM I made One Good Trade which was One Losing Trading.  On the open YUM settled in a battle 64.80 by 65.  Young Leo called out the fight and I took notice.  Also YUM was In Play showing premarket strength and gapping up.  YUM broke above the opening range battle and shot up to 65.70.  This was a very nice move to all time highs.    I was interested in buying the pullback.

YUM pulled back and found a buyer at 65.50.  I bought more.  An explosive upmove and then a shallow pullback matched with a buyer on the tape is one of my favorite intraday patterns.  I set a stop at 65.38.  I was stopped out of the lot I bought at 65.50.  I set my stop for below 65.25 for the rest.  YUM pulled back to 65.30 where there was some strength on the tape.  I bought some more with my line in the sand of below 65.25.   This is where YUM would show a clear intraday reversal for my trading time frame. I got stopped out.

This is a pullback trade.  It didn’t work.  After such a trade I review the trade for some characteristics that made this set up less likely to work.  One characteristic was the lack of a battle from above 65 to 65.70.  There were no short losers to squeeze along the way.  When a stock breaks cleanly from a battle level intraday and finds all-time highs I am interested in buying a pullback.  One mental note to make for the future is the subset of a lack of battle and YUM skipping prices.

Another characteristic to note is the pullback was a bit bigger than most patterns that trend cleanly.  Generally YUM holds that 65.50 if it is going to trend cleanly for the day.  Once we started heading towards a bigger pullback our chances of catching a clean trending stock diminish.

Overall I would not make changes to my trades.  In the future I will just be careful not to get too big with this subset of a pullback trade.  I will also be sure to be bigger on a shallow pullback as this is the subpattern that works best for my trading style.

Bella

One Good Trade

no relevant positions