Staying Patient in Trading ($hlf example) | Bulls on Wall Street

Staying Patient in Trading ($hlf example)

I received an email from a member today asking a very good question regarding missed entry points.

The question:

  • I’ve been in the trading room for the past couple of weeks not mimicking trades simply trying to analyze why Kunal will take certain trades. I have a question on two different plays. If you check out the attached pics you will see HLF intraday chart from today. Is there any signal for you to go into a chart like this or do you only trades setups you like instead of chasing a couple of points? 

The answer:

Typically, if a stock blasts through your entry point first thing in the morning, it will continue to move that way all day.  If you are in the chatroom, you will notice that even when this happens Kunal is still watching the stock closely.  Even if you miss your initial entry due to a morning spike, you should still have the stock on your radar and watch for another intraday setup.. even if it is a bit lower. The reason being that the stock now  has major momentum because it broke critical levels and most likely runs in that direction for a period of time.

From the above question, take a look at the chart of $hlf from today. The stock fell green to red very quickly this morning out of the gate and the initial crack was hard to catch. By analyzing the daily chart below of $hlf, you will see the reason WHY we were watching the stock (the stock broke major support levels on the daily chart on an earnings report). We were, therefore, watching for any type of weakness  in the stock to signal a short. When we saw the sellers step in so quickly first thing in the morning that was our cue and we knew that today was the day to be short the stock. If you missed the inital green to red move, dont worry, stay patient and  instead waited for it to flag intraday and give you the second entry point later in the day around the 42 level.

Summary:

1. Prepare the night before. Know which stocks have potentially powerful setups and set your alerts for the specific levels you are watching

2. If you miss your entry point don’t freak out. Often times, morning weakness in gap down stocks is a strong sign that the stock is indeed shortable all day. Be patient and watch intraday for a second entry point.

hlf

1 thought on “Staying Patient in Trading ($hlf example)”

  1. Three very nice entry points. Would be nice to see the daily chart, too. It’s such an important part of the BOWS education.

    Nice reply, Maribeth, thank you!

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