LB Trade on Oct 18, 2019 09:37 from MarcoG: Tradervue User Stock Trades.

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MarcoG

 

Consolidation & Pull-back play below pm low on Fresh News

Requirements:

Gap : >2.5%
RVOL : >1.5
pmVOL : >50 K
avg Vol: >500 K
Vol @ Day : >500 K
Float: >20 M
Short Float: Possibly >40%
Catalyst : Solid Fresh news / ER beats

Overall Picture

SPY didn't find the buyers to support a move testing the 300. It closed yesterday's session on previous day high. Traded flat in extended hours trading session to close pm session testing yesterday's day low. Not a good sigh for bulls. The consumer cyclical sector has been definitely hit. Several stocks belonging to it have been tumbling in pm.

Today's Watchlist

Today I had on the wachtlist: AXP, GIL and LB with an eye on KSU and K0. As continuation I was keeping an eye on CSX

AXP: American Express earnings rose 11%, better than views. The Dow Jones stock rose modestly early Friday. The credit card giant is nearing a buy point. The stock gaped up 2% in pm session to just fade it all to arrive at the open trading lower then yesterday's close. Basically this move let me lose interest on the stock surely no longer considering it as along while just interested in an eventual short below yesterday's low. I didn't tarde it cause yesterday's low has ben broken to then reject the spike thus non my favorite scenario.

GIL: Shares of Gildan Activewear Inc. tanked 12% in the extended session Thursday after the apparel maker cut guidance for the year and called for a 7% drop in quarterly profit. Gildan said it expects to report third-quarter GAAP per-share earnings of about 51 cents a share, and adjusted EPS of about 53 cents a share, both down 7% over the third quarter of 2018. Third-quarter sales are seen around $740 million, 2% lower than the same quarter last year. A previous guidance on Aug. 1. called for adjusted EPS growth to be flat in the third quarter on a projected sales growth. Gildan said it experienced "significantly weaker-than-expected demand for imprintables in North America and ongoing softness in international imprintable markets." I was on GIL cause of the bad earnings release. I was short biased but the stock just turned bullish trading few cents below 52 weeks low, level broken down in pm. I don't use to trade that often gap down going higher thus specially today in whinch I was starting risking 100$ I preferred to leave it apart.

Play

LB

Company Description

Sector: Consumer Cyclical
Industry: Apparel Stores

L Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty and personal care products, home fragrance products, and accessories. The company operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International.

Trade Scenario

Victoria's Secret cut jobs in Columbus this week, the company confirmed to CNBC, while also announcing the departure of another top executive. The lingerie chain cut about 50 jobs, representing about 15% of the headquarters staff, the news site reported.

Trade Variables

Symbol : LB
Gap : Down 7.7% to open with 5.87% gap
RVOL : 2.50
pmVOL : > 100 K
avg Vol: 6.4 M
Vol @ Day : 15.9 M
Float: 217 M
Short Float: 9.50%
Institutional Ownership : 75%
avg ATR: 0.92
ATR @ Day: 0.83
pmPATTERN : Gap down 5.4% and down drift till pm low at 7.7%. Took back 2% or so at the close of pm session.
Catalyst : Fresh News

Technical Levels

Support: 16.82 16.57 15.82(52WL) 13.41 10
Resistance: 17.74 18.24 20.26(MultiVWAP)
Inflection: 16.57

Trade Plan

I was following LB for a trade below level of inflection. In case of a pullback testing the level from below I would consider short it.

Set-up : Down-Trend Continuation on consolidation below pm low. Entering at the pullback to inflection point.
Side : Short
Size : 260 + 260
Entry : 16.58 16.71 avg price: 16.66

Takes :
Exit : 16.81 (got some slippage and exited at 16.83)

Trade Analysis:

Price just got a spike trading below 17.40 to reject and get to 16.66. I had support/inflection(in this case, at least that was what I have marked) @ 16.58. Price broke it down trading 16.40 to then start pulling back. At that moment I have placed my order. Got filled and set down my first 2 profit targets.

Intuit:

Price broke down the support at 17.58 and failed the first minute after pulling back to previous level of support at 17.71 pm low. Volume profile in my favor with a solid 400K shares.
I have with no hesitation insert my orders and let it be executed.

Tape reading:

Since I have entered the trade the tape told me to get out. It has been a bid party. I have seen only accumulation of bigger then avg bid orders. The ask has been thin filling most of the orders levels available on the Level 2. From 17.50 holding orders we moved to 17.58 still holding bids arriving to get forming an ascending triangle bottoming at 17.70. 17.70 has been retested and supported the move up to 17.88 (just 4 cents above my stop).

Internalization:

I didn't have any hesitation to trade my plan, I have processed all the information with a fast pace but a low and relaxed perception of the surrounding. Numbers on the tape, fast rejections and moves were all fine and under control.

Orders:

I have placed my orders and found executions at my price, while when closing out my position I have got some 3 cents slippage that brought my loss 20% above my 1 R.

Comments:

Once price broke the 16.70 touched then the 16.81 and got to pullback. In that moment I say (from the session recording) that this is the moment in which I will understand if the trade will go in my direction or keep trading higher. My general attitude was in holding even if the trade was not the usual move I use to trade. I have told myself to get out but I was fearing that the choice was moved by the size I was trading. Thus I have a kind of imposed my self to let the trade go eventually up to my - 1R loss at 80$.
I am really happy about that cause today has been a test for me on how I react on handling a position 4 times bigger then my comfort 20$ zone. I have done the same that I would with 20$. The consideration today is on the fact that I have understood only once in the trade that perhaps I have considered the wrong level of control. I mean 16.70 just 13 cents above my level was pm lows level that I usually take as point of interest and eventual inflection level but in this trade I have been influenced by 16.58 level of support forgetting perhaps to include the 16.70 as possible area of pullback. The presence perhaps of such level of support only few cents far from pm low level of support could imply a wider consideration of the trading area. I am indeed not surprised by the fact that my stop has been just few cents by 17.88 high price traded.

What I did not like about the trade:
I didn't like the fact of missing considering an important level of support marked already in pm. Obviously I didn't like to let the trade go against me but as I have said before I had to do it for me to pass this important moment in which I am increasing size. I am getting tested and that is what should happen!!

What I have liked:
I liked that I have done what I have prepared to do regardless the size. When preparing the open I have told my self looking at the camera that I would feel worse if missing a trade thus I have to enter if the pattern shows up! I have done it!

I wrote the report only on Saturday, the day after, cause yesterday Friday the 18th was my b-day and I have been partying a bit :D

10/21/19
I review the trade and I have realized why I didn't set 16.70 as pm low in the trade preparation. I have prepared the trade plan at 08:50 or so and price at that time was trading at low of pm at 16.82 (first level of support I have marked). A little very important detail that thx god I have noticed. So by tomorrow I will by the open update my levels accordingly.


Execution detail:

Date/time Symbol Side Price Position
2019-10-18 09:37:19 LB sell $16.580 short
2019-10-18 09:37:19 LB sell $16.580 short
2019-10-18 09:39:00 LB sell $16.710 short
2019-10-18 09:39:00 LB sell $16.710 short
2019-10-18 09:47:25 LB buy $16.830 short
2019-10-18 09:47:25 LB buy $16.830 short
2019-10-18 09:47:25 LB buy $16.830 short
2019-10-18 09:47:25 LB buy $16.830 0


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