Happy Sunday, Traders
I hope that you all had a brilliant weekend and past trading week. It was great to have a 5-day trading week after the prior shortened week, filled with a few standout opportunities, both swing and intraday.
My focus on these watchlists is to share my thoughts, plans, and insights concerning swing trading. However, as I shared last week and I would like to continue to do so going forward, I want to drop a few crumbs just in case any of you would like to explore the intraday plays from last week further.
Top Intraday Plays from last week:
- Cannabis Stocks: ACB / CGC morning blowoff extension short 9/12
- ARM IPO higher low momentum breakout into the close 9/14
- ARM day two momentum short scalping 9/15
- HOLO liquidation play 9/13
- FWBI small-cap stuff short 9/14
As I mentioned last week, Intraday trading, as it relates to a specific stock, is not something I can plan for in detail ahead of time. Why? Because new stocks pop up in the pre-market or intraday, it’s not always possible for me to plan intraday trades days in advance, as I do with swing ideas.
However, what I do, and urge you to do with your trading, is to learn specific setups in detail. Understand the variables that make up that opportunity, the expectancy, and the historical win rate, and develop your in-depth playbook. While I can’t plan to trade a specific stock intraday ahead of time, I can prepare for specific setups that will likely arise throughout the week.
Alright, now back to business.
Last week, the watchlist included two different ideas. By that, I mean that one idea was a straightforward breakout consolidation, and the other was a 100% reactive, unbiased idea that depended on whether the stock broke above or below a critical level.
The trade idea for Tesla worked very well, as the stock broke above resistance, held above, and traded into the target from the watchlist. This was a great example of how it can payoff by keeping it simple and reacting to price action above or below critical levels.
AMD, however, did not pan out. The stock did not break above resistance, so the idea or trade did not trigger. While AMD is still stuck within the consolidation, it’s beginning to look more bearish than bullish to me now, and therefore, it will be an avoid going forward. I’d instead focus my swing attention on better plays.
It’s important never to get married to one stock or idea. Be flexible, and prioritize your focus and mental capital.
Palantir Technologies (NYSE: PLTR)
While PLTR is up triple digits year-to-date, 138.79%, the stock’s performance has turned negative in recent months, down almost 6% over the previous three months.
Insider selling has increased, with ten insiders selling stock over the previous twelve months. More recently, the bulk of the insider selling has occurred in the second and current third quarters, with insiders selling about $76 million worth of shares.
Based on fifteen analyst ratings, analysts see a 13.57% downside with a consensus price target of $13.25.
From a technical analysis perspective, which is what I am primarily concerned and interested in when it comes to swing trading, I like the setup and R: R opportunity here.
My Trade Plan for PLTR:
*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.
A head and shoulders pattern has emerged on the daily chart. However, I am more interested in the right shoulder or bearish flag pattern, whichever resonates with you more, as it presents a solid risk: reward opportunity for a short swing.
$16 is clear resistance, and I do not want to see the stock reclaim that area and hold above firmly. Therefore, this is my stop-out zone.
I want to enter short on a lower-high push, fail near $15.5, or a breakdown of $15, and fail to reclaim.
My target for this trade is $13. This is a position that, if I get the desired entry, I would be okay with holding it for a week to a week and a half, so long as it remains under $15 and looks weak.
Canopy Growth (NASDAQ: CGC)
This idea also relates to Aurora Cannabis (NASDAQ: ACB) and other cannabis stocks, as it is a part of a broader sector theme.
The theme, or rather surge higher recently in price and volume across the sector, began earlier in the month with positive developments in Washington, D.C., a push for the SAFE Banking Act, and pressure on the DEA to reclassify marijuana to Schedule III. Department of Health and Human Services initiated the reclassification process, aligning with scientific data and responding to President Biden’s directive.
Along with the sector’s fundamentals and upcoming catalysts, I like the development of the charts across the sector, growing short interest, and risk: reward to the upside.
My Trade Plan for CGC:
*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.
This trade plan is slightly different from the rest, as I will enter my position with half the desired size on dips within the forming consolidation, with a tight stop at or near $1.
In that regard, I am predicting slightly, but I am doing so with half size and a tight stop so that if that trade idea is confirmed later on, I can size into it from a position of strength. If the trade does not work, I will take a predefined, small loss.
If CGC can consolidate near resistance, $1.7 – $1.8, I will look to add to my long position, achieve full size, and move my stop higher to $1.30.
I am looking for a breakout over last week’s high and a potential 1 – 2 day move thereafter towards $2.5 – $2.70.
