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MarcoG

 

BBBY

Oct 10, 2019 09:39


Shares traded: 380
Closed Gross P&L: $28.50
Gross Return: 1.10R

Tags:

Up-Trend Continuation Short Float above 40% PullBack Open Trading Day Consolidation Range

Consolidation & Pull-back play above/below pm high/low

Requirements:
  1. Gap : >2.5%
  2. RVOL : >1.5
  3. pmVOL : >50 K
  4. avg Vol: >500 K
  5. Vol @ Day : >500 K
  6. Float: >20 M
  7. Short Float: Possibly >40%
  8. Catalyst : Solid Fresh news / ER beats

Overall Picture

SPY got to all time high on the 09/19 and since then has lost around 6% to re-bounce around 3%. For as much as price rejected price levels giving scalping opportunities we have consolidated in a 2% pocket. Would be hard to break next resistance level considering also SMA100 @ 292.72 and Multi-Day VWAP @ 293.73. I expect a period in which price is gonna be literally stuck within the 288 and 295. Today opening @ 291 reconfirmed a certain strength reaching back after an after- hours sell off the yesterday's close! A further up move could be a possible scenario retesting the 100MA and Multi VWAP.

Company Description

Sector: Consumer Cyclical
Industry: Specialty Retail

Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. It sells a range of domestics merchandise, including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and various juvenile products. It also provides various textile products, amenities, and other goods to institutional customers in the hospitality, cruise line, healthcare, and other industries...

Trade Scenario

Bed Bath & Beyond (BBBY - Get Report) shares surged the most in more than two years Thursday after it hired former Target (TGT - Get Report) and Nordstrom (JWN - Get Report) executive Mark Tritton to lead the struggling home-furnishings retailer.

Trade Variables

Symbol : BBBY
Gap : 20%
RVOL : 17
pmVOL : >2 M (Could grant a further move up)
avg Vol: 7.4 M
Vol @ Day : 28 M
Float: 118 M
Short Float: 82%
Institutional Ownership : 112% (here I need to understand about it, and I have just got it :D)
ATR : 0.54
pmPATTERN : Bull Flag and consolidation at pennant
Catalyst : Fresh News

Technical Levels

Daily

Support: 11.97 11.60 11.30 10.50
Resistance: 12.35 12.50 12.70 13
Inflection: 12.35

Big view

Support: 10 9.75
Resistance: 13 13.80 14 14.80
Inflection: 13

Trade Plan

With a gap of 20% and a short float of 80%, SPY toward testing the 100MA, I guess we are aligned for further up[ move. Fresh News supporting the action! Though I was neutral biased cause 20% is hell of move!

Set-up : Up-Trend Continuation on consolidation above pm high entering at first pullback!
Side : Long
Size : 160 (Had to be 250 but I have wrongly calculated my stop thus wrong size accordingly. I have granted 0.25$ stop while I had wrote down and traded with the 0.16$ stop. I need to stay more focused)
Entry : 12.35 (point of control) 12.22 (VWAP) AVG price 12.28. Missed first add at 09:47 @ 12.45 (low was 12.47)
Takes : 12.53 12.69
Exit : 12.12

Recap:

Today I had on the watch list NTAP, DAL, ROKU and BBBY

NTAP fell in premarket trading Thursday after the stock received a downgrade from Goldman Sachs analyst Rod Hall to sell from buy, as well as a lower 12-month price target.
Up/down grades ar not my best but in days like this I keep an side view on those. Support at 48.95 was a good spot to enter in case of break and consolidation below! Next level of support was at 48 and 46.75. Enough room to place a decent trade. At the open the stock just bounced of pm low setting above VWAP. I lost interest toward it for a trade at the open.

DAL had conf call at 10 am. I don't trade stocks in conf call up to its termination. Conf call was at 10 I could trade it from around 10:30 am. Thus no interest for a trade at the open.

ROKU was surely the most interesting to trade at the open. Good push getting to next level of resistance at 122sh. There hasn't been not a pull back or any sort of hesitation for me to spot a good entry not in the middle of the ocean. I had my orders ready @ 119.40 / 119.05 / 118.25 for an eventual entry to any of those level of pull back but none occurred. What I could be able to take instead was the rejection of the 118sh point of control/inflection point. It has been a nice rejection with no chop and fake failure. It was worth the trade, but I still don't trade after had a "good" trade......

BBBY
  • Has been already on the scene due to the ER release few days ago.
  • Relative volume traded almost at 2 avg last trading week and today peeked again.
  • BBBY today was on watch after it hired former TGT and JWN executive Mark Tritton to lead the struggling home-furnishings retailer. Good enough to be on top of it.
  • 20% gap would grant if not a continuation higher but a fade perhaps filling the gap.
  • 80% short float would imply the need of a share refreshment? Buyers stepping in and for short holders time to unwind? I have given this interpretation for this trade today. - Institutional ownership at 110% explains that it can eventually exceed 100 percent of float, which means that, in addition to all the available shares, institutions have also bought up all the borrowed shares from short sellers who are betting that the stock will decline.
  • 2 M shares premarket was another good point in favor. In pm we got a nice bull flag and extended consolidation. Longer the consolidation and bigger could be the pop.
  • RVOL at 17 at the time of the trade, a good basement for a further move.

At the open the stock at first dropped to 11.70 level of support but immediately bounced at 12.24 close to next level of resistance, by minute 3 was already at pm high.
It took 2 minutes to finally start a move out of inflection point 12.35
I have then prepared my order at 12.35 for me to enter to an eventual pull back at level.
I would have added if price would have got to VWAP for a close below 12.12
I have got filled at 12.35 but perhaps the price action showed me enough to hold for a while.
Once at VWAP my second order has been executed.
I have waited for price to make is way and my stop in the end held nicely :)
Price bounced off of the 12.19.
My 1st take order has been filled and 2/3 of my position were left.
I have sat a new buy limit order @ 12.350 but unlucky my order was missed for 1 cent. Basically almost every trade I face this kind of situation..
At target 2 I have got filled for another third.
Since then I aimed to add to any level of resistance on the way to 12.35. I didn't want to get a price higher then 12.35 thus I have added only 50% of my tier. I granted in that way to get a price that could hold an eventual pullback at inflection point and a bounce off of it.
Price got to 12.34 and the position was closed

Comments:

I think it would have been easy to just first buy lower cause the action has been quite decisive with no chop.
Though I have managed my plan and executed my orders. My hearth rate is definitely under control now. Is now 2 months that I practice Yoga and the results are INCREDIBLE!
I used to check my heart bit with a Garmin GPS watch and getting to 160 being sat it's a kind of video game reaction. Now I trade standing and my heart does not have any particular change cause to the trade I have opened.

I have respected my 2 takes but I have then left on the table some. I have told myself to lock first 2 targets and then eventually add again.
Perhaps this is wrong. Perhaps I have just to trade the price. As long as it stays on the level and I am affordable and accountable for it it's all fine.
Paying attention on sizing perhaps I could provide more adds at the beginning of the trade. I usually take a 10$ trade so I can go up to 4 to then risk my 40$ planned risk!

My Best Exit P&L here is a poor 61.3%
That is cause I haven't lock at the way back. Target 2, Target 1.
If price would have kept is way up now I would not write about this.
I need to add something for me to take a choice if I have to take profits or holding on a position. Surely the add was just not needed. Just an order placed at the half dollar. Just in the middle of the ocean.

An entry at 09:39 for as much as it would identify a consolidation area in the coming hours of the trading session, has to be taken as a scalp with take as much as you can! I am not sure about this I am trying to figure it out, but surely when you take it all out from the table and price then goes in your favor you don't want to end up with no shares.
A possible way out for me here would be to lock at target 2 one more piece, the same at target 1 and finish with 1/4 of position to get to open price.
Once there I should not close it break even so perhaps keep trading the price but being aware that in this way I can't trade ONE AND DONE!
I have then to keep trading to collect an avg of 3 trades per day through the entire trading session to grant me the opportunity to be profitable.
The one and done grants a certain profitability if traded with accuracy but increases the risk level due to the fact that your day has to be made by one trade.
Work in progress here!!


Execution detail:

Date/time Symbol Qty Price Position
2019-10-10 09:39:21 BBBY 80 $12.350 80
2019-10-10 09:41:08 BBBY 80 $12.220 160
2019-10-10 09:45:36 BBBY -50 $12.510 110
2019-10-10 09:50:13 BBBY -50 $12.660 60
2019-10-10 10:08:28 BBBY 30 $12.500 90
2019-10-10 10:11:10 BBBY -90 $12.340 0


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