Yes. As long as a stock is offering excellent risk/reward setups over and over I will keep talking about it. And for those of you who don’t know me personally it is not in my nature to repeat myself. I prefer to explain a concept once and then move on to something else.  But apparently two blog posts, 5 mentions in our pre-market meeting and numerous tweets  has not been a sufficient catalyst to have most of our traders focus on trading NAV each day.

NAV entered my heart last Thursday when after gapping down huge it reversed and trended higher for several points. The move allowed our hardest working trader to put together his best daily performance in his short 18 month career. On Friday, it was our #1 “Second Day Play” and those who decided to be professional and trade all day despite the nice Summer weather were rewarded with another multi-point move. On Monday Bella spearheaded the get short on the Open contingent based on the 3rd day gap up pattern that he has probably been trading since Clinton was in office.

The 15 minute chart below covers what I view as the 6 clearest trades NAV has offered since last Thursday. Notice that 4 of the 6 trades had consolidation areas around key support/resistance levels from prior trading sessions. When I am trading a stock that consolidates close to a recent inflection point I look to trade with more size as the stock has already shown me that it can have a large move away from these prices. Stocks are just like you muscles. They have memories.

Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is [email protected].

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