Traders,
Im excited to present several new ideas, all of which hold the potential to make significant directional moves. I will share my thought process and actionable trade plans with you, as always.
Just before I do, here’s a quick reminder. As the market continues to make new highs, it might be easy to get into an overbought, and everything is a short mindset. As I said last week, I don’t want to step in front of a freight train. The ideas and setups I shared last week continue to work in this environment. Notably, the breakout in SNOW and MARA had fantastic directional momentum. PLTR and ARM offered powerful continuation moves post-earnings. As long as these setups continue to work, this is where my attention is from a swing point of view. It will be obvious when things change, and then it will be time to react and adjust. Until then, stick to what is working!
So, with that being said, here are my favorite swing ideas for the upcoming week:
Breakout in Netflix
The first two ideas I have are straightforward and are a carbon copy of the breakout experienced in Amazon on Friday.
Post-earnings, Netflix has consolidated and now presents a straightforward, favorable risk: reward set up should a breakout occur.
Here’s my trade plan:
Multiple timeframes align here, which I like. This meets the criteria for a classic breakout continuation swing long, similar to previous ideas I shared during the earnings season last year, like the long idea in CELH or DKNG.
Suppose the market remains strong, or Netflix displays relative strength and breaks over resistance on the hourly timeframe, around $570, with authority. In that case, depending on the entry setup, I will look to get long with a stop placed either at the low of the day or below the most recent higher low intraday.
My first target to trim a light portion of the position, cover risk, and raise my stop to a previous higher low will be around $580. After that, while a move toward $600 is the ultimate target, I will cover over half of the position over a 1 ATR up move from the breakout level toward $585 – $590. The remainder of the position will be tightly trailed, scaling out as the stock makes new highs intraday on the 15-minute timeframe and raising the stop using previous higher lows until the lofty target of $600 is achieved or stopped out on the remainder.
Continuation in META
Similar to the above plan, and like I said, this is a carbon copy of the Amazon breakout on Friday. Based on how extended META is from its rising 200-day SMA and how elevated its RSI is, my timeframe here will be a full day to 1.5 days should the breakout occur. I won’t look to overstay my welcome, and once the position works, I will trail it tightly using the intraday VWAP, specifically if it begins to hold below it.
Here’s my exact plan for entry and targets that I have in mind:
Similar to the plan in Netflix regarding overall strength in the market and/or relative strength displayed in Meta. I will be looking for a move above Friday’s high and confirmation of support developed along with time spent above the $474 – $475 region. With the above met and an intraday uptrend formed, I will get long with a stop placed below the intraday higher low or the low of the day. The first target is the high of the earnings gap, near $486. After that, I will get down to half of my position toward a full ATR up move, near $490, and trail the stop in the same fashion as planned in NFLX, with $500 as the final lofty target.
Backside Swing Short: Pops to short in HKIT, TOP, MLGO
There were fireworks with small-cap, low-float Chinese stocks last week as HOLO swanned higher, squeezing shorts on Wednesday and Thursday. That move brought many sympathy plays in other small-cap Chinese stocks.
Now, as the craziness has subsided, and many of the sympathies have given back the majority of their moves, I have alerts set in case they pop back up into areas of potential supply/overhead / where they are likely to fail from. This is similar to previous setups and ideas I shared in TTOO and CYTO, among many others, if you recall.
Alerts set in several names while keeping a close eye on the leader, HOLO.
For example, I would be interested in shorting TOP if it were to push back toward $5.5 – $6 and fail. That would confirm a backside lower high, with a level to risk against intraday. Once entered, I would take off half of the position toward mid to low $4s and hold the remainder for a move back toward $4 – $3.50s.