Traders,
Last week’s action all but confirmed the adjustments that I have been discussing for the previous several weeks. It continues to be a trader’s market, a momentum-move2move tape, versus a swing environment.
So, following on from the prior week’s thoughts and adjustments, here are the stocks I’m watching coming into the week, with an emphasis on intraday action versus swing.
(NASDAQ: MSTR) If the market experiences continuation from Friday’s selloff, and we get a lower high in Bitcoin / a break of last week’s low, my focus will be on MSTR intraday for momentum. I think at that point, the premium will really start to matter, and MSTR could unravel some. In that scenario, I would be focused on shorting pops versus the HOD, covering extensions sub-vwap, and if we get a weak close, I might look to take a piece overnight as a swing with $250 in mind as a final target.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
(NASDAQ: MLGO) Friday’s small-cap flavor of the day. The stock has a history of similar moves, price action manipulation, and a heavy short bias among participants on day 1. That, along with infinite cheap locates, negative sentiment, and incredible liquidity, raised some red flags for me on day one.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Following the selloff into the close, as long as there is no offering or liquidation on Monday morning, I’m now interested in potential intraday short opportunities. Ideally, I’d like to see a push above the 2-day VWAP, an extension for its 1-day VWAP into $7 – $9, and a sharp failure. That would give me the confidence to short the turn versus the HOD, targeting a retracement intraday toward $5 or lower. I won’t be interested if this is hovering above 1 and 2-day VWAP.
(NASDAQ: SMCI) The deadline for their filings to be current and up-to-date is just 2 days away. Given the stock’s recent run-up, I’m inclined for a potential sell-the-news scenario to play out. So, if they make the filing on Monday and the stock has an initial surge $60+ but begins to give it back, I’d look for a short versus the previous 5-min high / HOD, depending on the action. If fast enough and favorable, the initial headline could offer a breaking news long scalp, but given the recent move higher, it would just be a scalp. Alternatively, if the company fails to meet the deadline in the unlikely scenario, that would open the door for a more significant and reactive breaking news short opportunity.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Contents of the filing will also be important, with re-stated earnings or further insight into regulatory happenings potentially shifting the narrative and trade plan. Various potential outcomes depend on the nuances, so it’s essential to have several different IF/THENs prepared to react quickly and, most importantly, not to fight price action.
Additional Thoughts and Plans:
Exceptional strength lately in China. I no longer see the R: R in names like BABA at current levels, but JD and TME, for example, are presenting favorable looks right now. If pullbacks hold, I might look for legs higher.
Overall, it is a much more flexible and nimble approach for the upcoming week. Less of a swing mindset and mainly a momentum, intraday mindset. With that approach, my plans and biases can quickly change depending on headlines and price action. I’ll continue with this approach and mindset going forward until I begin to see a shift.
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