Happy Sunday, Traders!
I trust you’ve all had a wonderful weekend, and I’m sure many of you are getting ready to travel for the upcoming holiday to be with friends and family. So, firstly, I’d like to wish you all a beautiful, safe, and peaceful upcoming Thanksgiving!
What an incredible week for the markets, with further upside and momentous continuation from the previous week. Of course, as given the heads up in the last watch list, we have the CPI to thank for that. Notably, the tech sector didn’t lead the way last week. Instead, the financial and consumer discretionary sectors displayed relative strength, with the fresh inflation data acting as a catalyst. It’s something to take note of going forward into year-end.
Now, before I get into a couple of fresh ideas, I want to touch on briefly some points and share a lesson with you all.
Firstly, the market will be closed on Thursday, November 23, for Thanksgiving. Also, the market will close early on Friday, at 1:00 pm Eastern. Friendly reminder to make the necessary risk, trade management, and adjustments with your scripts if you are semi to fully automated.
Secondly, and more for the intraday active trader, I noticed many traders break rules when trading SGD this week. Look, I used to always get in trouble by shorting stocks early simply because they were up too much. But as you get more experienced, you must employ rules and disciplines to minimize losses and keep you out of trouble.
When I mention confirmation, this is what I am referring to. Without it, there is no trade to trade. So shorting a stock because it is the shiny object on the day, but lacks confirmation and edge, is a sucker’s game.
*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.
So, the takeaway is to know what to look for and only act IF that materializes. For example, if you wanted to short SGD, you would have needed to wait for a trend break or failure to reclaim VWAP and lower highs. The above would signal a momentum shift and an intraday backside.
As it’s a shortened and broken-up week, I am adjusting my plans and focusing less on breakouts in large-cap names like DKNG from last week and more on potential one-day intraday swing opportunities.
Lower High Intraday Short In SGD
With the stock on the backside after Friday’s trend lower and day one trend break, I am looking to short pops in the name that confirm intraday and fail to base above the multi-day VWAP.
*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.
So, ideally, I am looking for the stock to push between $5.50 – $6.50 and fail to base at those prices, thereby providing a level to risk against intraday, and then looking for a fade back towards the low of day/low of day close.
With something like this, a potential liquidity issue name, and extremely low float, I will stress only entering once I have received confirmation and a well-defined failed level to risk against intraday.
If I get that level to risk against intraday, after a lower high, I will continue to use discretion for the remainder of the day to exit if the stock begins to grind back on light volume and reclaims VWAP.
Lower High Intraday Short In CYTO
This stock had beautiful volume, liquidity, and range on Friday after soaring several hundred percent, slightly above the warrants at $0.45. Going forward, $0.45 is a crucial area and one I will use.
*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.
I’m going to keep it stupid simple here, and if the plan doesn’t materialize, that’s ok, no trade. There is power in that. Being okay with not having to trade something unless it correct.ly sets up based on my plan.
If the stock pushes back into the key area and fails to hold, using the 30-minute to 1-hour timeframe as a guide, I will look to short versus the high of the day, likely risking about 5 cents. My target for the trade would be a move back into support from Friday, so $0.30 – $0.26. If the trade works seamlessly, I might look to hold it overnight, targeting further downside after covering half of my position into the target zone.
So that’s it for this week, traders. I am keeping it simple and waiting for large-cap stocks to consolidate and setup further. After this broken-up week, plenty of cleaner charts should be with high-quality risk-reward swing setups.
So enjoy your holiday, good luck for the week, and I will see you next week!
The post The Weekly Trade Plan: Top Stock Ideas & In-Depth Execution Strategy – Week of November 20, 2023 appeared first on SMB Training Blog.
