Traders,
I’m excited to share my top swing trading ideas for the week ahead. This week’s ideas will be different from last week’s plans due to Friday’s shift in the market. In the short term, it is time to adjust.
So, let’s get straight into it as I share my actionable ideas, plans, and trade management for my top swing trading ideas for the week ahead.
Lower High Continuation Short in Semis
On Friday, a significant shift occurred in the semis. Across the high-flying semiconductor names, short-term tops definitely appear to be confirmed after Friday’s engulfing action to the downside.
*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.
It’s a notable shift and change of character and presents an exciting opportunity for the week ahead.
With the entire sector experiencing selling on Friday, one can express this trade in many ways. I will focus on SOXL, my vehicle of choice, and NVDA, the sector leader.
Here’s my plan for SOXL short / Semi sector continuation short:
This thought process and plan can be transferred to a host of other names within the sector, like TSM, AMD, SMH, NVDA, and so on.
Given the almost 12% decline on Friday, I will not be looking to chase this short on weakness or a gap down. In fact, if this significantly gapped down and washed out, I would turn my attention to a relief bounce long.
But the main idea is to look for a push higher, into levels from Friday and ideally the 2-day VWAP, to get short for a continuation move lower.
After day one selling on Friday, following a historic run higher in the sector and overall market, the sector can certainly experience up to three days of profit-taking and price discovery.
I am targeting a push between $50 and the 2-day VWAP, forming around $52 and a lower high to confirm my entry into the position short. Once that level is confirmed intraday, I will short my full-size with a stop above the day’s high. My first target will be a move to Friday’s low, where I will cover half of my position, thereby taking off risk and locking in profits.
After that, this turns into a swing trade, whereby I will be trailing my stop on a five-minute timeframe, the timeframe I will be trading this on. Specifically, lower highs on the five-minute timeframe will act as my trailing stop, as I target a swing target of $45. My timeframe for this position is between one full day and two days.
This sector and its many movers will be the primary focus this week. However, here is another short idea that will be on my radar in case it can push back into an area of supply.
PBM Lower High to Short
Typically, I will avoid such a low-float, small-cap stock on the short side. However, the volume here tells the story and offers an interesting opportunity should the stock reach certain prices again.
*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.
PBM traded close to 150 million shares on Friday and closed at the low of the day. What does that tell me? It tells me that everyone who bought the stock is underwater. So, if the stock can push higher on Monday—this week—without trapping shorts, it could likely fail and offer a great short opportunity as the many stuck longs look to exit on a push.
So, here’s the plan for a 1-day swing short:
I am targeting a push near the 2-day VWAP between $3 – $3.50 and hard failure intraday. Once confirmed, I will short versus the high of that move, targeting an all-day fade back near $2. Again, as this is a one-day swing, I will look to trail my stop using the 5-minute timeframe and lower highs, ultimately targeting a move back to the low $2s.