We had some great action in the market today as the SPY gapped down premarket right to support and bounced off of the $242 level. The hottest names to play were definitely AAOI and SHOP as they exhibited the same textbook bounces. When the market trends like it did today, buying on the dip will let you win multiple times throughout the day. If you were in the chat today you would’ve capitalized on these hot names. I call them out as I trade them live.
AAOI
On the daily chart, AAOI gapped right down to the 50 Simple Moving average. After a series of down days, we knew that the price opening up at support was just the setup it needed for a big range play. Once the bounce was confirmed we waited for a pattern to develop and at the open, the stock setup for an Opening Range Breakout. We bought into the stock at $59 and sold as it trended above $60. As the day progressed, AAOI developed a 1-2-3 flag buy at which point I re-added into my position. After the red to green move, the stock put in another flag pattern allowing for a great run to $63.
SHOP
Another great bounce play we were calling out was in SHOP. Now our chat room played this great bounce just three days before. Just because a stock paid off doesn’t mean the momentum’s fizzled out. We kept this on our radar and once the stock opened at $82.50, we were watching it for another potential bounce. After putting in a double bottom support we entered for a long at $82.29 once it broke its descending trendline. SHOP had the potential to reach a price target of the previous day’s lows at $84.50 so when it setup again we were ready. We reentered the flag break at $83 and again at $83.75 scaling out as it trended all the way to $85.50.
We had a great day trading these bounces and hope you can join us for the next round. 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 kunal@bullsonwallstreet.com today!
