294 [Memestocks back in play. Feb 25, 2021]

  • Looks like we’re getting a little bit of a gap down, unfortunate I was really hoping for a gap up, this is day 3 of the bounce attempt, a gap up would have been nice, now a lot of these setups that I had are not valid anymore, TQQQ, TSLA, PLUG, TLRY.
  • TSLA I was really excited to short if it ran into the declining 10day, I would have hoped for a gap up, it’s the same setup as back here [3/3/2020], had a big run, cracked, found support on the 50day, had a 3day bounce, on the third day gapped up into these declining MAs look how it gapped into the 10day, then it had a next leg lower.
  • GME wow did I underestimate this, I thought it was gonna go to 100 or something, I would have kept much more shares if I knew this would happen, now up almost 300% since entry, pretty good, and this is why you stick to momo stocks, high ADR stocks, you’re not gonna get a move like this trading GE just saying. Moving my stop on GME up slowly, you know what I’m gonna use lods. GME flipped short. Could fade back to 100, could also go to 250, I don’t have much conviction on it yet. GME has reclaimed the vwap, I hope I get stopped out hope it goes to 250 today and maybe get an epic short tomos. Looking at it in hindsight I should have covered some, it was a big move from highs to lows it went down 40%, I should have covered some oh man that wasn’t good.
  • GME was such a nice setup, prob one of the biggest momo stocks of the last 10years, then it had this big fade and got really tight, and you know what the tell was like two days ago when the market was down, a lot of these momo stocks were down 10/20/30%, but GME was green on the day, printed an inside day a tight tight day. That’s what I was talking about, once it reclaims the declining 10day, that’s when fireworks can happen.
  • GME, So I did have a few false starts, but once it started breaking this trend line yesterday at the open, that’s when I started buying, I bought 100kshares, and the first thing that happened after I bought it, is it faded was really close to stopping me out, then it started reclaiming, built hls, and once it took out the hods that’s when I added another 50kshares, then intraday midday it was still building hls above vwap, and look how tight it got, here I added another 50kshares or so, so I had a little over 200kshares low 48s avg, I would have had more shares if it was more liquid. Then it exploded, I didn’t see this thing going to 200. I sold most of my shares high double digits, then I sold some in the low triple digits, and then by the time it squeezed I was already 3/4 out of it. Sometimes the big moves come after the big moves, but it’s so hard to hold a stock that’s already a double/triple in a few hours. This is why when you play the long side, especially on momo stocks like this, you don’t ever sell everything into strength, that’s a loser move, you always, always try to trail some, bc you never know when you’re gonna get an outlier move like this.
  • GME short a month ago and now GME long yesterday, about 1/4 of my career profits have come from those two trades, that’s called the snowball effect, that’s called exponential effect, you build on past success. Pretty insane.
  • KOSS I’m trying to get a locate, it’s building lhs intraday below the vwap, and now it’s breaking this range, but locating 100kshares will cost me 100k, I think I’m gonna pass on that deal.
  • MARA could be a potential day 3 bounce short setup, but not yet.
  • RIOT is tightening, actually gonna be a good long setup by tomos I think, if it can stay like this today could be a good long setup, also could be a good short setup, rn it’s building lhs and hls, ideally it goes sideways a fmd and whichever way it breaks, I’ll just do what the stock is telling me to do, you listen to the stocks and try to figure out what they’re trying to tell you and then you do it, no opinions needed.
  • W potential pocket pivot yeah, too late now but yeah I like how it undercut the 200day two days ago, good eye, it is a potential pocket pivot/ep.
  • RVLV it’s a potential ep, also breaking a long ipo breakout, ok this looks interesting. Big eps growth triple digit but neg rev growth, that’s not great okay let’s look at the analyst beat, so they reported 26c per share vs 16c estimate, not bad, these things can work. It’s already trading above avg vol on the day, prob gonna end up trading 5/6M or something eod, but the key on these things is to identify them pm or ah, and buy them on orhs, ideal entry on this would have been around 45. Great find.
  • Citron has learned their lesson, on GME they went short when it was htfing, in the low 40s back in late Jan, GME had made a big move and was digesting it’s move, building hls. Now look at GMBL they tweeted positive today, exact same chart, it’s a htf. Fundamentals only matter sometimes, but technicals matter all the time.
  • TWTR, subs they’ve said it before, it’s not anything new, it’s not an ep, it has to be a surprise.
  • KIRK idk I don’t think it looks that great, I would have liked more sideways for the 50day to catch up, it’s already a very long and old trend, more sideways would have been better. I really want to trade the perfect setups myself, I don’t want any so so setups.
  • SAVA is a 5* setup, this thing is ready, unbelievably good looking setup.
  • PLL setup yesterday, actually pretty decent, I would have preferred a fmd but technically acted really well on the sell off day, hit the 50day and rebounded all the way, you can just draw this line hls all the way, then it had this range. It was a bit tricky one, not a 5* but it was a setup definitely, showed some incredible strength.
  • TNA looks really strong almost at the highs, small cap index IWM is the most extended one but it’s also the strongest one, look at how it undercut the 20day and reclaimed, and now it’s building a flag here. That’s a bullish sign, every time you have something that’s up a lot that can’t correct, that’s a sign of strength.
  • The survival rate of active traders over say a 3-5year period it’s pretty low, bc to be a successful trader and not blow up, to beat the market many many years over a long time, there’s not only a lot of things you must stop doing wrong, there’s also a lot of things you must start doing correctly, and a lot of people just never piece it all together, there’s just so many moving parts and you always have to adapt. Learning setups is easy, you spend a few hundred hours on a specific setup you will be pretty good at that setup, entries exits very easy very simple, position sizing risk management, these are easy things, the hard things are like knowing when to trade that setup aggressively and when to take a step back, that’s really hard, and one of the few things I still struggle with even after 10/11years of trading, and also this constant adapting to the markets, people just can’t keep up.
  • Usually when DOW is outperforming, that’s a hard penny market, you want the easy dollar markets like MM says, but how do you know which is which? That’s the hard part, it takes many years to understand the difference, you kinda have to go through these cycles, through a raging bull, a relentless choppy sideways market, and a relentless bear, like Feb/Mar2020. So you kinda need to go through those cycles a couple of times to get a deeper understanding of the market, what works when, what doesn’t work when, bc the only way to do it is to go through it, to lose money, that’s the only way you learn. You can’t learn it from a book, you can get setup ideas and stuff but at the end of the day you have to piece it together, and it’s pretty much your listening skills that’s gonna determine if you’re gonna be successful or not. If you learn to listen to the market, then you will be a successful trader for the rest of your life.
  • MRNA, so pretty much when it broke this uptrend, it’s been having a very big move last year, and every time it breaks its uptrend it usually has a very clean move, it trades very clean to the upside and the downside, so when it started failing the 10day here, that’s when it got on my radar, and on this day here [22/2/2021] 3days ago when it broke this little range here, gapped down below the 20day, pushed into the 20day and got rejected and when it took out the lows of the day that’s when I shorted it. That was confirmation that okay this is an extended stock, it broke down, tried to rally, got rejected, the path of least resistance is to the downside, that’s the setup. It’s just a breakdown setup, not exactly but it’s the opposite of what you want to see on the long side.
  • MRNA I lower my stop to hods, they also reported great great rev growth, but it’s not a surprise, we already knew, they’re gotten many hundred M+ government contracts so it’s already known they were gonna have great rev growth. Look at this company, they had low double digit rev and then covid hit and they started selling their vax and they’re been getting contracts, now look at the rev, gone from 8M to almost 600M in less than a year. If you learn the skill to find companies like these, there’s a bunch every year, that’s a big big edge. There’s a reason this company has gone from $20 a year ago, to $150 today, if you can find and identify companies like these, you will have an edge for life. There’s so many ways you can trade them, earnings/rev growth are fuel then it’s up to you how you want to trade/invest in them. But the key point is, you want to trade things that have fuel that drives them higher, and that fuel can be earnings and rev growth, it can be a sexy story, or combined with potential big future, doesn’t ever have to materialise, but if the story is good and the market environment is right, those stocks can make big moves. QS for eg, they’re not gonna have any rev for the next 4years but once they get rev the potential is big, and that’s why this stock made a big move. Sometimes the fuel can be high short interest like GME, AMC etc, but you need to identify the fuel, and then you can trade them in many many diff ways.

#meanreversion #shorting

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