UBNT Trade review, to catch a falling knife.. | Bulls on Wall Street

UBNT Trade review, to catch a falling knife..

Hey guys, @szaman here.I talked about UBNT in the chat room all day as a bounce candidate and mentioned to watch 23.33 area for a bounce . I know few of you were able to catch this trade. We were able to make  2.33 per share  day trading this name today.Lets review.

UBNT one of those high flying names came from 35.85 to  24 in a matter of 5 days due to earning miss/rumors. I found  this stock last might as a bounce candidate as it was completely stretched out of its Bollinger bands and planned to watch it today for a flush out and reversal.

To get an idea of how much more down it could go, I used a weekly chart to pin point the number or area that could serve as a bounce point.


23.33 has been served as a support area on the weekly chart for at least three  occasion. As stock plunges  for five days to weekly support,it usually bounce for a long trade  since shorts will take some profit on that 1st touch and usually use that area to cover and late shorts will get burned shorting, thinking that the stock is about to collapse.

Lets look at the intraday setup:

Hit low of the day 23.27,close to my magic number 23.33 and a hammer candle. Sell volume lower than previous days. I went long
at 23.55 with stop at low of the days, risk .28c.
Sold some 24.20.Stock base above 20 EMA and S1, tells me it might try one
more push.Wong again 24.35 with stop below 24.Sold all my shares 25.88 on that massive spike as it approached 100 SMA on daily
chart  for 2.33 point gain from my original entry.

Hope it helps and educational. We do this types of trades all the time at Bulls.Lets find the next one!

 

4 thoughts on “UBNT Trade review, to catch a falling knife..”

  1. Thanks for this review. I love these bounce plays because they are easy to scan for potentials, and using this review I’ve build a strategy for 4 things they need to have in order to work well:

    1. At least a 3-5 day selloff on some kind of rumors/earnings miss, or anything that seems irrational. I haven’t put a number on it yet but generally I’m looking for something that has shed at least a month’s worth of gains in a very short amount of time.
    2. Clearly defined support on a weekly chart where the bounce can occur.
    3. Lower sell volume on the potential last day of the selloff.
    4. A hammer or other bullish reversal pattern on the intraday chart to seal the deal and give me a defined stop price.

    Sound good to you?

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