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.
The market continues to melt to the upside and is fresh from making new all-time highs on Friday. While one might say we are short-term overbought, I certainly don’t want to step in front of this freight train. Instead, my focus will continue to be on what is working in the current environment: buying breakouts and being involved in day two onward momentum continuation plays.
So, with that in mind, here are my top swing ideas for the week.
SNOW Breakout Continuation
SNOW broke out on Friday and experienced a significant uptick in volume, thereby confirming the breakout and adding an element of authority to it.
The stock broke out of an enormous, higher timeframe consolidation and base. This move might have legs ahead of its upcoming earnings later this month.
*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.
Here’s my exact plan for SNOW:
This is a stock with a high ATR of 7.59. Therefore, size/risk needs to be carefully considered and adjusted accordingly.
After breaking out convincingly on Friday, I am looking for a dip / higher low to enter long upon confirmation for continuation.
I will target a dip toward the 2-day VWAP, around $215, for a higher low and confirmation that buyers have stepped up. If the confirmation is received, I will enter long with a stop placed near $210 – where the stock broke out from Intraday on Friday, along with being previous resistance on a higher timeframe. My first target for this position would be a 1 ATR up move above Friday’s high toward $227.
I plan to take off most of my position into this target. After that, I will trail my stop conservatively using the 15-minute chart higher lows and scale out of my position on higher highs intraday on the same timeframe, with a final target in mind of $230 – $235 for what I plan to be a maximum three-day hold.
APP Consolidation Breakout
Another stock that is set to report earnings later this month on February 14. Currently, it’s consolidating in a wide-range multi-month consolidation.
Another stock where risk and size need to be carefully adjusted and considered as the stock has a Beta of 1.69 and an ATR of 2.05.
*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.
Here’s my plan for APP:
Solid bounce off converging SMA’s on Friday, along with a notable rise in volume and range expansion. Buying highs in the stock has not worked during this consolidation, and therefore, my focus is on buying a higher low… sort of similar to my plan in SNOW.
I will get long if the stock pulls back near its 2-day VWAP and confirms a higher low. Once confirmed and I enter long, on reduced size to account for a wider stop given the stock’s high Beta, I will set my initial stop near Friday’s low to give it some room to breathe. Once the stock takes out Friday’s high, I will move my stop to the previous higher low and target a move near $50 to take off half of my position. I will trail my stop here using 15-minute higher lows and scale out of the position over a maximum of three days by selling new higher-highs intraday on the same timeframe.
Additional Backburner Ideas:
Several ideas that I have alerts set in but are highly conditional and will take up less of my focus than the above two ideas and other intraday strategies and focuses of mine:
Netflix: Consolidating after a power earnings move. Alerts set near the resistance of $570 in case the stock breaks above with an uptick in volume, providing an opportunity for a two-day momentum breakout.
Mara: Good follow-through bounce from a previous watchlist idea. It is now consolidating in a tight range. Alerts are set for a hold over $19 for a potential 1 – 2-day breakout move toward $20 – $22.
Goldman Sachs: significant consolidation on the daily chart. Alerts set near resistance for a potential breakout move. One that I will monitor closely over the next few days.