In this video, learn how to effectively trade stock halts. A junior trader from our desk shares in step-by-step detail how he crushed a stock halt opportunity safely in a crazy stock. Let’s get to work on sharing these important trading lessons so you can grow your trading account.
View Video Transcriptin this video learn how to effectively
trade
stockholds hi i’m mike bellafiore
co-founder of smb capital
and we’re a proprietary trading firm
located in midtown manhattan and i’m
also the author of the trading classic
one good trade
and the playbook in this video a junior
trader from our desk
shares in step-by-step detail how he
crushed
a stockhold opportunity safely in a
crazy stock
let’s get to work on sharing these
important trading lessons
so you can grow your trading account
[Music]
so here is a breaking news and
um halt trades that had been on u1 and
this was 9 25
20. and so big picture in catalyst
so company overview urban one
incorporated is a silver spring
maryland-based american media
conglomerate
founded in 1980 by kathy hughes the
company primarily operates media
properties targeting african americans
so for the news this was bank of america
announced today the issuance of the 2
billion equity progress sustainability
bond
designed to advance racial equality
economic opportunity and environmental
sustainability the first offering of its
kind in the financial services industry
the transaction also represents the
first sustainability bond issued by u.s
bank holding company where the social
portion of the use
of proceeds will be dedicated to
financially power of black and hispanic
latino communities
so for this trade strategy these halt
trades
heavily rely on the tape i need to see
elevated volume to get long
and decreasing volume to exit i need to
be watching similar names u1 ek
byfc and carve i need to understand how
to manage risk with these halts
and then also watching the bigger and
more experienced traders give me ideas
on how to manage this trade correctly
so for intraday fundamentals currently
you want to sharing at four dollars and
80 cents
has atr of 0.91 an oddball of 7.8
an average daily volume of 1.75 million
institutional ownership of 8 percent
market cap of 9.5 million for the short
float i couldn’t find that data
um but for the shares outstanding it was
1.58 million and a wide change of
yesterday of 40 percent
um so for my support i’m gonna be
watching four eight four six
for resistance gonna be um five five
seven
six six point eight seven and seven five
my entry ideas i’m currently waiting for
u1 to unhaltz
when it unhaults i want to see bids
coming in above five
for a range break there could be more
halts so i’ll be careful my risk
when they resume then for my exit ideas
and risk management
my exit and risk management will be
based on the tape and resistance levels
so here are the long-term technicals
that i’m going to be looking at as you
all can see we’ve been in a super tight
consolidation for over a month now
and that that 5 6 is the top
consolidation range since august 27
6 6 is a significant level from initial
up move and the failure to reclaim
momentum
again you guys can see and then seven is
a technical
higher time frame technical analysis
level and a psychological number
um so definitely watching this and then
10 is the previous bottom of this range
so here’s a high ti a higher time frame
consolidation hourly
so you guys can see we’ve been kind of
retracing off this 470 to 5
level and every time we pop we just fade
so it’s something to keep an account
for this stock and here are also higher
time frame hourly
so the seven dollar level you guys have
seen been touched before but we usually
fail
even with these little run-ups here just
higher time frame levels as well
so what i’ll be watching now is this
news affects not only you one
but a lot of the same sector names on
the news some of you watching byfc
carve and une k and just so you guys
know unk
is this is the same um company
but these are class d shares so it
consists of 38 million
shares compared to u1 so it’s a lot less
volatile
you guys can see during this breaking
news we see that high increase in volume
and prices increasing
and all these same names if you want to
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workshop than from
years of online education so for my
trade management
what i want to see is after we in halt
at this four nine
level i’m watching the tape to enter
into two tiers of risk
risking that four nine again that five
dollar range is that hourly range we’ve
seen
over this over the month so my exiting
targets would be
the unholtz and the six dollar ta
technical level unless we continue to
see buying
so again i’m just entering in my two
tiers of risk we ended up halting at
five
four um now i’m in this position where i
want to
decide you know once we unhold do i take
some risk off
and so i decided to take you know my
first tear off
and i’m watching the tape to see that
continuation see that buying volume
now enter uh end up entering in again
into the next hall
and that was my second okay so let’s
break this down
just a touch more specifically can you
go back to your daily chart
how important on a scale of one to ten
would it be if it got above five
critical i think that tells me that
there could be higher continuation
um and this has also been a large you
know it’s been over a month we’ve been
in this consolidation so this is kind of
that change in character
and the last time we did see that we had
volume up into this level so this gives
me really good risk to reward and
somewhere where i can really put on that
risk and that’s why i was putting on two
tiers of risk
right when that candle unhalted and
seeing that price above five
all right good so this isn’t just a
technical level this is a super
important technical level
let’s bounce ahead to the halt so what
halt is that
first halt second half third half fourth
halt this is the first halt
so or the second half yeah this is the
first after we unhaul it the first time
and so now i’m watching not five so that
matters right so it matters whether or
not it’s
after the first halt or after the second
halt
or after the third halt the earlier the
halts the better
it’s going to be for you right exactly
exactly okay good now let’s flip back to
when you’re comparing other stocks in
the sector
so how are they doing are they really
running are they snoozing
how would you describe their price
action oh they’re running
uh all of them and so once i see you
know u1 is in this halt
i want to be going through byfc carb and
you want to k to see if we do have that
continuation
especially with u1 ek and we are we are
seeing that that
that volume coming in which is gives me
confidence to the upside
okay good so we’ve got all three of
those things that we’re highlighting
for a reason that makes this trade more
specific that gets you thinking more
specifically that this
is super important level this is the
first after the first halt
and the other stocks are truly running
they’re not just ticking up
all right back to your trades awesome so
yeah once we break above that five
level again that monthly consolidation
that we’ve seen that gives me a higher
conviction
but again it’s all about watching the
tapes i want to see those bids really
come in
and we do so entering my two tiers of
risk now when you unhalt
you have to be careful and so you know
it’s okay to take some risk off the
table but i should have been more
mindful you know we’re midway through a
range and that next level should have
been the 6.620 level
so once i take off that risk and i
really see that continuation that
elevated volume coming in
i end up putting it back on that other
tier and so now i’m thinking okay
we’ve been very overextended from this
v-wap
and i want to see if we do continue so
after we unhaul for the fourth time and
go parabolic
my logic has changed since stock is
probably overextended
going into that seven dollar technical
level and it’s about three atr’s from
the news release
so i exit my position um but add it back
or
so i exit my position after we go open
the seven super light volume
we come down and then you see the flush
that’s the change of character on the
tape
so now we flush we halt down and
immediately
um once we halt yeah we go down to five
four but immediately re-bid
and sound so now i’m watching the tape i
want to see that 5
8 level hold and when we do i enter back
on
and we do flash up to 6 2 and 6 3 but
again it’s on light volume
so i’m not really seeing that super
continuation just yet
um but also we’re coming in to 4 p.m so
i want to be careful about how this
trades
and that’s basically the the more meat
of the move but i’m going to show you
how i made a mistake in this stock
so my for my trade management and t
training mistake
so after you won on halts um i ended up
getting long right before
and i should have been more mindful of
this because you know we’re not allowed
to trade after 4 p.m
um but when i was talking to another you
know a trader who’s above a class above
me
he said that he believed it was going to
open at uh 3 58
it ended up not but i was talking
through the trade kind of with him and a
couple of the other guys in our chat
um and it did end up unhalting and i was
able
to get out right after hours um for a
decent gain
but you know i ended up breaking those
rules um and so that’s something that i
have to take accountability of
yeah i didn’t make money but you know
coming to a firm you have to be strict
with those rules
and let’s just say it did open up where
i couldn’t get out and i had to get
help from you know my floor manager that
could have been something that i
regretted
but so once after we on halt we go down
exactly into v-walk
and so once this news happens and we
have this very strong move
you know i go and i talk to armand who’s
another junior trader who’s a class
above me
and we talk through this like thinking
this could really be
an after hour mover and i think him and
a lot of the guys at our firm really
killed this trade after hours
so just for the tape and just to say you
know how critical it was
so once i see you one and halt at that
four nine
that 490 level which is above the
monthly range i enter into those two
tiers risk
we immediately see the tape running to
5’4 with high volume
on the second on halt we see we open up
at 560 and take some risk off
you want to u1 immediately runs into 620
which leaves me led me to add back onto
that second tier seeing that volume and
seeing that continuation
at this point we go into the fourth hall
and we’ve done three atr’s since the
news broke
when the stock resumes u1 heads back
into seven dollars
that technical level but it’s on low
volume and that’s when we see the take
switch and we see that flush and so i
exit my uh positions at six nine and six
fifty and after the flush from seven you
wanna immediately re-bids and stabilizes
at that 580 level
and so that gave me a good risk to
reward you know shorts covered
and now we’re we’re stabilizing and so i
enter back on that
but i exit on the low volume spike to
630.
so ty is there something about the float
in this stock
or the short interest in this stock
that you’re also taking into account as
potentially driving the stock higher yes
so there’s only 1.5
million shares and so that’s a low float
it’s actually
pretty close to a micro float and so if
you have
it can be very volatile and that’s why i
chose u1
over byfc and carve and une k i thought
it was going to give me more volatility
to the upside and also knowing that you
know
shorts could get squeezed in this now i
couldn’t find the short interest
um on this but knowing from our firm we
have trade this the short
side before as well um and just seeing
how it traded with that volume gave me
confidence to take these long positions
yeah okay because because you really do
want to have
behind this idea
some some reasoning some thesis as to
why this thing’s gonna
run run super power it’s gonna be super
parabolic
that’s what makes this that’s what makes
this worth taking a shot at
is that it can get super parabolic
yes sir i definitely think with the news
and seeing how that same
almost the same sector was trading um
together with that news it gave me even
more confidence
and i think it was pretty big news
though i think you know the first bank
of america to do this
in two billion dollars you know that
could really impact the stock especially
you know with only 1.5 million shares
you know it could give us great
volatility
good that’s all going into it low float
big technical level
good news catalyst other guys in the
sector are running
first halt
that’s that’s that’s all helping a lot
so just for the trade view i think i did
a decent job
of scalping and manage my risk on this
trade
sticking with the trade instead of just
one scout helped me secure over two
times the profits
shorter term time frame levels and
scaling in and out accordingly
help me give me good risk to reward but
one of the bigger things is watching
you know our eight figure traders
swaying and sharp catch both sides of
the trade
gave me an understanding of how the
bigger and more extreme uh experienced
traders think
um and just i should have put a limit
orders closer out to seven
just to really fight for that price
instead of having to scale up manually
that’s something i’m going to really
work on um and also this trade
definitely could have been turned into a
swing trade after hours
and i think it gave me a lot more
confidence talking with armand and a
couple of the other guys
that really killed it after hours and
seeing how cleanly it uh worked off vwop
and then finally just trade these names
bigger you know this is something where
you know if you have good risk to reward
and you’re not risking you know more
than you can make
you know those can set up for great
trades yeah you’re doing a lot of things
right here
and i want to highlight some of them for
some of the younger guys that are
listening so juan
terrific job talking to other guys in
the middle of the straight terrific job
reaching out
in the chat with some of the other guys
getting their feedback
seeing what they’re doing really good
job also
using our technology to see what some of
the as you said eight figure traders
this year are doing in this particular
name
really really terrific job and don’t see
people do this very often but great job
comparing how this stock is doing with
other stocks in the sector to give
yourself a feel for how much this can go
up
that’s really well done i would
encourage you to keep doing more of that
solid job understanding technically
where this stock if it gets above
can really run just based on technicals
and then i think you mentioned
you want to trade this bigger which is
fine but you do a really good job
of being a natural risk taker here so
there’s going to be people that aren’t
going to want to
take this trade because they’re not
comfortable with the risk
but what i’m seeing from you here is you
are a natural risk taker you’re willing
to take
risk as long as the reward is there
and you’re not just focusing on the
overall risk but you’re comparing it to
the reward
so you’re taking risk appropriate when
there’s a lot of reward
a lot of traders can’t do that they just
only are there for reward
if there’s very very small risk and part
of
what you see with really really great
traders particularly when they get
to eight figures is they look at it as
risk and reward they don’t just look at
it as
risk and they’re willing to push the
buttons
they’re willing to get long you know max
is a natural risk taker
does this very well on our desk and they
will push the buttons naturally
and are happy living with the results so
you do that really well here
thank you sir and yeah i would just add
on to that just watching swank and shark
you know play this from both sides and
then the unhaul to seven and seeing that
flush
and i know they killed it so that was
really cool to see how they think
and definitely want to incorporate that
into future trading is to be able to
take those both sides
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