Recap: Sabato's Market Watchlist 8/2-8/6
Welcome back everyone! We experienced a fantastic week of trading at True Trade, LLC this past week. My personal watchlist went 4 for 4 (mmm Wendy's...) with many other great plays from our other 2 analysts!
In this blog, I want to get into some further detail about how the stocks on my watchlist played out, how they should have been executed, and a little more of why I picked these trades. Let's get into it!
1. Tesla: $TSLA:
You can review the watchlist blog here, but in short, I was looking to enter Tesla long (calls) on the break of $700, just like the other 10,000 traders who were watching this level. Yes, I'm using a bit of hyperbole, but many traders I follow and am friends with had the same level. Here's the breakdown:
Resistance was strong on a daily @ $700.
Uptrend (red diagonal) was held at end of the week last week
200 SMA (green line) was respected at the $655 area
Tesla closed just above the previous break down candle at $686.2 on a daily chart on 7/30/21
Volume was higher than average on 7/29/21 and 7/30/21, driving the bounce off trend and support
Given all this, a break of resistance ($700) looked like it was a strong possibility once again
Daily chart cleaned up a bit:
Once Telsa had the nice overnight gap up above support in pre-market on Monday 8/2/21, that was confirmation it was very likely the long position would finally present itself! What I do after analyzing on a daily chart is move down to a 1 hour and 30 minute chart for confirmation/entry points, then down to a 5min and 1 min charts to execute entry. Let's take a look:
30 min chart of 8/2/21 (pre market and post market light grey):
The gap of found pre-market support on the light grey zone of support from $690-695 area, then continued to hold $700 before open. Also, $686.2 was held in after hours on Friday 7/30/21. Let's look at a 5 minute chart.
5 minute chart:
On a 5 min chart, you can see how the $700 level served as a launching pad. Now, you could have bought into long position here, but I personally waited for a retrace. It did not happen how I would have liked, but I waited to buy in on the retrace to 709.7 area due to 1. work, 2. wanting the best entry, and 3. not wanting to chase. This way, you can also see if the support holds further before getting in the long trade. Because I failed to get further upside targets, I checked the daily to find farther out targets and ended up taking profits around $712 area, when in reality it could have been left. Regardless, I stuck to my rules and took profits!
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2. Moderna: $MRNA
Again, I took the same approach when charting. Daily first, then work my way down. I was looking to enter $MRNA long over $358.5-360 for early entry then over $362 for a larger move and confirmation. Reminder of the key levels: Key levels downside: $353.1, 350.5, 342.8. Key levels upside: $358.7, 360, 362, the moon! And we certainly tried to get to the moon with this one.
Here's the breakdown:
The uptrend in red was confirmed
The buy zone in green was held
The uptrend was broken on 8/2/21, but the buy zone was held. This made me want further confirmation (above $362) before getting in the trade. As you'll see in the second picture below, the trend and $362 cross each other where MRNA takes off.
1 hour chart: here you see the buy zone hold and trend hold until the top right of the image
30 minute chart: notice where the trend and $362 (cyan line) meet...
Moderna turned out to be a massive runner. When a stock makes all time highs, taking profits can be tricky. Personally, I lock in profits on a play like this when volume begins to slow and always keep a trailing stop loss (SL) so you guarantee a green trade. This is always a way to control your emotions. If you put your order in, you don't have to worry about the uncertainty which surrounds when to sell your position because that decision has already been made. Excitement will be sparked when you see value of your position increase, but having a trailing SL eliminates some of this.
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3. Nvidia: $NVDA
$NVDA was another very similar set up. There was an uptrend with higher highs and higher lows along with previous resistance at $200. Here's the breakdown:
NVDA has the uptrend (red)
$197-199 area had been resistance several times
20 day SMA flattened out around same area (cyan line) on a daily chart
The stock cooled off after its massive run and 4:1 split
Entry offered off trend line and confirmed once over zone and later $200
Daily chart: notice the 20 SMA in cyan around $197-199 support
30 minute chart: ideal entry is on Wednesday 8/4/21 on retrace back to $198.23/top of grey zone.
Another great trade!! This one even offered a few entry opportunities while holding the trend and inching upward.
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4. Advanced Micro Devices: $AMD
$AMD has been on a absolute monster breakout, so when this happens, I like to buy the dip down to the previous day's key intraday level or the previous day's highs if the stock opens up the next day above previous day's close. For this one since it was at new highs, I only used a 30 minute chart and it's recent price action. Here's the breakdown:
$AMD stayed flat over the weekend and opened up around Friday's close
It dipped down to a key level from Thursday ($104) and rocketed upward $4
30 minute chart:
As we can see, the dip to $104 was beautiful. This same dipping pattern happened the next day as well. Another great play!
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Bonus plays:
I won't go into too much detail here. I like to leave these for you to review and see if you see the key levels, how the stock reacted, and figure some things out on your own using what I just discussed! Remember, every play is unique, but a lot of the same technique can be applied over and over to the same scenario. $PYPL played out, $AAPL did not break up like I wanted, and $AMZN continued to range.
$PYPL: broke 275.6 to the downside and rode down to $269 area as indicated!! Great short play for a few dollars downward.
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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!
-Sabato
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 👀
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