Recap: Sabato's Market Watchlist 10/4-10/8

Updated: Oct 11, 2021

Welcome back everyone. The volatility was fun, right? Knowing how to navigate the market in volatility feels like a cheat code, doesn't it? Or making money when the market is going down? Well, put in the time and energy, and I promise you can learn how to profit in all market conditions (without being a broker who collects commission and makes money on transactions regardless).


This week's watchlist went 4 for 4 on the main watchlist and 2 for 2 on the bonus plays (yes, again....)! What else do you want from me??? Our members made some great profits again this week. Hope you caught some off the watchlist, too! Check out the watchlist here.


In this recap, I will get into some further detail about why I picked last week's trades and how they did. I like to keep these short and sweet....


If you want to skip down to a certain play, click the corresponding link: $NFLX, $DG, $IBM, $MA. Bonus plays: $FB, $ZM


1. Netflix: $NFLX


Why I picked this trade:


$NFLX put in new highs. I was looking for momentum to keep on chugging despite the broader market.


Here's what happened:

  • $NFLX made new highs on 10/4, but soon sold off with the rest of the market

  • 10/4: we closed above support at $599 area.

  • 10/5: Rocket ship to new highs!!


Daily chart:



5 min chart, 10/4 & 10/5:


How I would execute the trade:


On 10/4, there was an extremely quick play in the first few minutes which could have been scalped. Personally, I usually don't play something like that due to emotions playing a huge factor combined with the fact that there are no definite price targets proven by price action. Scalp is the only option there.


I would have favored the upside for the next day, 10/5. Calls on break of $609.3 for early play, or play it super safe and get in on a break and retest of $615.6.

 

2. Dollar General: $DG


Why I picked this trade:


$DG had a nice sized sell off into support. I was looking for continued downside and a bounce on a few support levels


Here's what happened:

  • $DG sold off with the market 10/4 and broke opened right at support, which held briefly before more downside came

  • We held the lower support around $205, then danced between the 2 support zones, the upper now acting as resistance.

  • We bounced off the $205 buy zone, yet stayed under 200 SMA.

Daily chart:




30 minute chart:




How I would execute the trade:

I was looking for more downside on this trade idea, so a break (30 min close) below 207.2 would signal entry for puts, which happened 10/4. I would ride this all the way down to my next buy zone at $205, which is exactly where we got bought up again ;)

 

3. International Business Machines: $IBM


Why I picked this trade:

$IBM had a strong close Friday 10/1. We crossed back over the 50 SMA to the upside. We were approaching strong resistance, which IBM rejected last Friday 10/1.


Here's what happened:

  • $IBM broke through the $144 area on 10/1 briefly, then rejected

  • Both the plan for the upside and downside presented plays


Daily Chart:


30 min chart:




How I would execute the trade:


The set up was hard to catch on 10/1. I would see how we closed on 10/1, which was right at the sell zone. Because of this, I'd favor a downside play on 10/2 if we opened within/below the sell zone. I'd wait for a cross below 144.2 area to enter the downside. I'd take profits at 143.2 and then set to break even, which would have caused me to get stopped out. Swinging would have played out nicely, but with this volatility, I do not favor swings of full size (really, I don't favor any).

 

4.Mastercard: $MA


Why I picked this trade:


$MA held the 21 SMA nicely week of 9/27 - 10/1 and made a run up to resistance on Friday 10/1. Resistance was both a sell zone and also the 200 SMA on a daily. I did not favor either upside or downside, so I had a plan either way.


Here's what happened:

  • $MA rejected almost exactly the bottom of my sell zone and 200 SMA on 10/4 when the market collectively sold off.

  • $MA fell ~$20 per share on 10/4


Daily chart:



30 minute chart:



How I would execute the trade:


With downside confirmation by rejection of sell zone and broader market sell off, I'd enter partial position of puts off the opening rejection of the sell zone in red above. I'd then add on at $357.4. My price targets would be each level (white and yellow) above with full exit of position once $347 was broken. Again, every time you take profit, SL must be moved to break even at a minimum!!!!! If any contracts were left, I'd let one run for fun with a stop loss well in the profit I already made.


 

Bonus plays:

$FB: We broke below that $338 and sold off on 10/4 for a nice short play.


$ZM: We rejected that $274 and made it all the way down to $250 area for another nice short play...


All winners this week.... what are you waiting for?? Share this with friends!!!! And join the discord for FREE!!!!


Until next time....


- Sabato


That's if for this recap. I hope this helps you understand my style more and explains my methods. It was a great week for call outs! Join our discord for free. Let me know you saw this post! Check out past watchlist @ https://www.truetradellc.com/blog/categories/watchlists to see if any plays are still live or if the levels truly work 👀 ** THIS IS NOT FINANCIAL ADVICE** I can do this on and on for every stock , but the best way to get them live is by joining the chat ;) https://www.truetradellc.com/stock-signals-membership Email: truetrade1313@gmail.com Instagram: https://www.instagram.com/basement_financials/ Website: https://www.truetradellc.com/ Twitter: https://twitter.com/Bsement_Finance

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