Shared by
Emilie_BOWS
Daily: gap down into an open gap
Intraday: sell the open
I don't normally jump in a trade at the open so this trade was an exception.
I saw a big gap down, crossing the daily 200 SMA, into an open gap (stock had room to move to at least $56). Volume during pre-market session was very high and selling pressure was also extremely strong. I preferred a textbook ORB setup but also prepared to jump if there was strong selling out of the gate. I took 1/2 position size then another 1/2 when I saw how fast the selling was immediately after the bell. I didn't take profit on the first spike but I did move my stop under my entries to protect capital. I added again after a quick consolidation under VWAP. I moved my stop to just above VWAP after this entry. This 3rd entry looks like a chase but I was confident that lower prices were much more likely based on the price action that I was seeing.
I started scaling out after $56 (gap fill). I got out after I saw a failed break down under $54.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2017-01-23 09:30:01 | QCOM | sell | $58.470 | short |
| 2017-01-23 09:30:03 | QCOM | sell | $58.160 | short |
| 2017-01-23 09:34:43 | QCOM | sell | $56.800 | short |
| 2017-01-23 09:38:09 | QCOM | buy | $56.030 | short |
| 2017-01-23 09:54:54 | QCOM | buy | $55.060 | short |
| 2017-01-23 10:25:21 | QCOM | buy | $54.050 | short |
| 2017-01-23 10:46:07 | QCOM | buy | $54.040 | 0 |
Comments
Emilie_BOWS
I believed all the selling was done at $54 so I didn't want to short again too soon. Here are my thoughts on the price action:
- The float is huge and the stock had already made a big move from $63 (previous close) to $54. It was selling non-stop since pre-market open. So the chance of much further selling from $54 wasn't high (do not short there !). The fake break down at $54 confirmed my belief that sellers were exhausted.
- The pullback to VWAP looked a little too strong for my liking.
- I felt a big floater that just had a big move needed a longer consolidation or a deeper pullback before any further selling could happen.
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Hi Emilie,
This time, what made you weren't interested for the VWAP play later at 11:45a.m-12 pm?
Thanks