We at Bullsonwallstreet is all about momentum and trends. We use support and resistance levels aligned with price action and patterns to find success in not just stocks but all markets. Recently, we’ve been applying the same core strategies to navigate the futures and cryptocurrency markets in addition to stocks like SHOP.
On June 12th, we traded SHOP, making about $1600 playing off of a great setup. On Friday June 9th the market had a huge down day, particularly in the technology sector. But by the following morning all stocks opened weak. We knew that if the market flushed down at the open, there’s a good chance for a market reversal. When the market broke below the previous day’s lows and it couldn’t hold, that was your fake breakdown. That’s when the market snaps back and when you want to be longing stocks, Tech stocks in particular.
So this morning I had a premarket list which included NVDA, SHOP, WB, and more. These stocks broke down on Friday but right up to support levels on the daily chart. If the market reversed I knew that there was a strong chance for a bounce if the market reversed.
SHOP's Intraday Bounce
Today SHOP opened up at 90, which was pretty weak. In that early morning flush, it pierced the lower Bollinger band and tapped right into the previous support spot on the 50 SMA. This is the same level as previous price support at $81.00. With multiple levels of support, one of the things that I do is to converge multiple patterns and multiple layers of a stock. When you have pattern convergence, it can apply deeper meaning to those particular areas. When you start to converge a lot of support in one area along with the price pattern, now you’ve got yourself something awesome. That’s where you can really catch great bounces.
At the open, I did nothing and just let it spike down. I knew where my bounce level was and I patiently let it fall lower. Once it comes down here, I used a green candle to make sure its holding before longing this thing with a stop directly under. I had a 300 share position and sold a few hundred with each pop. With the rest of my core position, I just played the trend for the rest of the day. We caught a $7 bounce right at the open.
Remember to always be mindful of aligning on multiple time frames. Strive to see an idea in the big picture and then use your intraday chart to guide your entries and exits. But you must have an overall thesis on the trade.
If you’re not sure of the setups and price patterns that we’re talking about you can learn them all here at our Bulls Bootcamp. It's an intensive 60 day course to teach you exactly how I trade and why. To learn more or signup, email me at email@example.com today!