Traders, Happy Sunday!
I sincerely hope that you have all had a relaxing, peaceful weekend. As I mentioned last week in the blog and video, I will be traveling until the end of October, so the posts will be shorter and slightly different until I return from my travels.
But don’t worry, I won’t leave you hanging! I would still like to introduce fresh ideas either each week or review the ideas from the previous week so that while I am traveling, you are still able to advance your progress and further strengthen your trading career.
With that in mind, traders, I want to review the ideas this week and provide updates on what was discussed last week.
Many ideas worked out brilliantly from last week’s watchlist and additional trade ideas I provided in the weekly video posted on YouTube on Monday.
Breakout Triggered in Advanced Micro Devices (NASDAQ: AMD)
After several months of consolidation, AMD broke out on Friday with increased volume. Last week, I discussed how I was looking to get long if the stock could break above the consolidation resistance AND hold above.
The stock broke above the resistance, which had lowered to $105, and closed near the day’s high. If you would like a refresher on the idea, I urge you to read last week’s post to understand my original plan and thoughts.
*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.
As the stock broke out on Friday and successfully held over resistance, further validated by a strong close, the trade appears to be on.
Going forward, $104 is a reasonable stop loss area, as I would not want to see the stock fail and re-enter the consolidation – that would signal a false breakout.
I would like to see the stock pull back to $106ish and make a higher low, indicating that an uptrend has been established and buyers are stepping higher.
The target for the position remains the same, as mentioned last week: $120.
Last Week’s Short Idea in Novo Integrated Sciences (NASDAQ: NVOS)
Sometimes, an idea is spot on, which was the case with NVOS. The plan laid out last week materialized perfectly. Regardless of whether you were in this trade or not, it is an excellent opportunity to review the action and further understand my thinking.
For the original plan, please refer to last week’s watchlist, where you will see my plan and thought process.
Specifically, I wanted the stock to push back into the $0.40 – $0.50 range of supply and CONFIRM a lower high on the hourly timeframe versus the high set on 9/13.
On Thursday, the stock briefly broke above $0.50 and immediately failed, thereby confirming a lower high and stuff on a higher time frame – that was the confirmation and signal to get short, risking versus the high of the day.
*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.
As I mentioned last week, once the lower high was confirmed, it could trade to my targets within two days. On Friday, the stock closed near $0.30.
This is a textbook example of a lower high, backside short-swing opportunity in a fundamentally flawed stock.
For those interested in setups like this, please investigate further the setup, characteristics, and fundamentals behind the move and stock.
Last Week’s Short Idea in FEMY: Solid Example of Backside Short Swing
Lastly, I want to briefly outline the change of character that got me to go short FEMY.
During the weekly watchlist video from last week, I discussed how I wanted to see the stock exhaust over $4 and squeeze out stubborn shorts holding this, then a reversal and a clear shift in momentum to get short.
*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.
On 10/2, that’s the setup that offered itself. The stock squeezed off the open on abnormally large volume, signaling to me that stubborn shorts were being squeezed out of their positions and late-to-the-party longs were chasing the stock higher.
This blow-off move to the upside after the stock was already up significantly from under $1 was a clear exhaustion move that signaled the end of the front side.