JDST has been on a tremendous trend for quite some time. But once the stock reached $103, it went on an epic tank. Eventually, it reached the 50 SMA on the daily chart with some oversold stochastics on Friday. With all of these oversold conditions, on May 15th I was looking at this stock for an epic bounce play.
While watching it intraday, I was looking for an entry pattern. As the stock started to fill in the gap, I added a couple 100 shares at $71.00 with a stop underneath. As the stock started to move I sold off into the spikes. But as JDST pulled back into the VWAP, I was looking to add shares when the stock showed weakness. As it starts spiking I’m selling off into it.
Later on the stock starts to rest and develops a flag pattern. Once it shows signs of strength, I add 200 more shares into my main position. Remember what I’m doing is, I’m trading around a core thesis. I have an overall idea of what the stock will be doing for the day. By believing that JDST will be a huge runner I keep that core position as all times while adding at the setups and selling into the spikes.
As the stock bases out in the afternoon, I begin adding again at $73.40. As traders our job is to get as big as possible within our risk parameters when we have a trade that is working in our favor. This is especially true when it lines with our core thesis, our big picture. At this point I added a full position with a target of the gap fill. My big mistake was selling off all of my shares once this target was hit. I made $1400 but after I left, the stock flagged again and took off.
Moral of the story – big picture for JDST was to anticipate the bounce. Then I waited for the intraday setup and then I trade around my core position when I have that big picture thesis. Sell some into the spike, re-add into the patterns. Be relentless with your trades and your discipline.
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