Archive for the ‘Trades’ Category

Update on Swing VWAP $AAPL Trade

February 15, 2019

I decided to close my Swing VWAP trade in $AAPL. It’s been unable to close above the upper VWAP, so it looks weak here:

I’ll watch for a retrace and another setup.

Example Swing VWAP / RSI Divergence Trade: $AAPL

February 8, 2019

Here’s a trade I entered in Apple about 2 weeks ago where I used the Swing VWAP and the RSI MultiDivergence indicators.

Back in January, the market had gone through a good decline. I was watching the RSI divergence on AAPL. Around that time, a big divergence showed up. This was about the largest in the last two years, and is circled on the chart below. Because of that context, I wanted to look for a long entry. After the swing low on January 3, AAPL kept above the Swing VWAP. It pulled back close to the Swing VWAP, and then on January 15 it had a bullish reversal candle (white arrow). That means the bears are losing, since it couldn’t penetrate the lower VWAP. I entered at the end of the day (yellow line) with a stop at the prior day’s low Swing VWAP (red line), and a target at $185 based on prior resistance.

So far, the trade is going according to plan. My stop is at $160 now, and I just have to manage when I take profits–at the predetermined target or in a discretionary manner. I’m really liking the Swing VWAP for how it tracks what side is winning and what side is losing. As a trader, your money comes from the losers. Markets move because they have to, and that happens because people are blown out of their incorrect positions.

Example Divergence Trade: Netflix (NASDAQ: NFLX)

October 23, 2017

Here’s a divergence trade I took last week in $NFLX, using the Multi-Divergence indicator in my trade plan. 

The setup: NFLX announced earnings on Oct 16.  Price made an all-time high.  I looked at the chart and saw a big divergence on the volume-weighted MACD.  The last big divergence in June led to a big drop. So I was looking to get in a bearish position. 

The candle on Oct 17 is the most recent bar on this chart. I saw that the bar had made the all time high and then fallen down below the prior day’s close, which I took as my bearish entry signal with NFLX at $200. 

The plan: $190 looked like a possible support, and a return to $204 would tell me my timing was wrong. I thought this move should happen in the next few days, so I bought the Nov 3 weekly options 197.5/195 put spread for $0.97.  I chose the 197.5 strike instead of the at-the-money 200 strike because it had higher gamma—it would have a larger change in delta with movement if I was right.  If the move didn’t come in the next day or so, I would get out and move on. 

I didn’t have to wait long:

The day ended red and had a good follow through day next. When the 190 support was nearly hit, I went to take profits. I sold for $1.57, which is a return of about 62%.  I love it when a plan comes together (extra Hannibal).

Note that the divergence indicator wasn’t the entry signal—it just provided context to give me an edge.  Divergences can often resolve with a continuation in the trend instead of a reversal. The context combined with the actual reversal behavior in the daily candles was what led me to take a trade. Always have a plan before you trade, and always follow your plan. My failures have come when I don’t do one or both of those things. 

New Trade: Long YELP

March 21, 2012

I bought a starter position in YELP today. I like the business, and I also like the technicals. I started considering it after @ragincajun and @the_real_fly
were taking about it.

Here’s the daily chart:

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I like the consolidation here under $24. I also like that price is still above the initial IPO trade price. I also like that it has been creeping up slowly lately, a few percent at a time. I bought at $23.20, and placed my stop at $20.20, underneath the recent swing low. I decided to enter at the price I did from the 5 min chart, as we retraced to the day’s VWAP:

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I intend to hold this for at least a few weeks as a position trade as long as I don’t get stopped out. I would consider taking partial profits at a retest of the $26 high, and I will also consider adding more shares later if the stock acts right by making new highs.

GSVC Update: Position Taken

January 30, 2012

Looking at the chart for GSVC, I’d expect it to retest the support at $16. I placed a buy limit at $16.06. My stop point would be just under $14, with my target a retest of the near $20 all time high. So we’ll see if I get filled. Here’s the chart showing the 16 support:

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UPDATE: I pulled the buy limit down to $15.75 for 1/31/2012. Just got filled at that price. Stop level is $13.25, target is to sell any pop from Facebook IPO news, the retest of $19.9x all time high if we get there. Here’s the current chart:

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UPDATE: I just closed it out at $17.45 as I trailed up behind the late day price rise. I saw all the potential resistance around $17.50 at the left and didn’t want to wait out the retrace, so that’s +1.7 on the trade, or just about +0.85R on the trade.

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