Today during our AM meeting we highlighted AMZN and the 123 level as a shorting opportunity. This turned out to be a wonderful intraday trading opportunity. As intraday traders gravitate towards a longer holding period, for us Trades2Hold, set ups like AMZN must be mastered.
AMZN had earnings Thursday night, gapped up on Friday, and then sold off for most of the day. So coming into today a follow through on weakness was very possible. AMZN gapped down today as news broke that led some market players to feel skittish about AAPL’s ability to gain traction in the e-book market. We saw below 123 as a Trade2Hold opportunity.
AMZN violated 123. I started a core short position. Often I am asked about exit strategies for Trades2Hold. Reasons might include:
a) the market substantially changes
b) a huge buyer will not allow AMZN to trade lower
c) the intraday downtrend is broken
d) breaking news hits (Goldman upgrade for example)
e) long term support is found
f) your price target is met
g) the seller or selling pattern dissipates.
You must develop your reasons that make sense to you as to how you would exit a Trade2Hold like AMZN above. For me, today I chose door number C. I held a small core short until the intraday downtrend was broken.
For intraday traders who are struggling develop your Trades2Hold that make sense to you.
Best of luck with your trading!
6 Comments on “Trade2Hold Exit- AMZN”
Hi Bella,
About door C. Often I find a algo will take the price just above the trend and bring it back into the trend (happens in GS and other fast stocks a ton). Are you generally exiting immediately when it goes above the trend or are you waiting for the price to hold above the trendline. Thanks.
Hi Bella,
About door C. Often I find a algo will take the price just above the trend and bring it back into the trend (happens in GS and other fast stocks a ton). Are you generally exiting immediately when it goes above the trend or are you waiting for the price to hold above the trendline. Thanks.
Eric,
Really great question. I wait for it to hold above the trend line.
Thank you for the excellent contribution to SMB Blog.
Mike
Eric,
Really great question. I wait for it to hold above the trend line.
Thank you for the excellent contribution to SMB Blog.
Mike
Thx Bella. This post really helped.
Thx Bella. This post really helped.