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.
If you’re not sure of the steps and practices 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!