GE Trade on Oct 30, 2019 09:44 from MarcoG: Tradervue User Stock Trades.

Consolidation Squeeze Play above pm high on ER beats !!

Requirements:

RVOL: Possibly >1.5
pmVOL: Possibly >50 K
avg Vol: > 1M
Vol @ Day : > 1 M
Gap: If possible but not strictly needed
Long Term Chart : Possible Pocket, trend already defined and strength.
Float: > 20 M
Short Float: Possibly >40%
Institutional Ownership : Possibly > 100%
History of Gap Follower: Neutral
History of former runner: Possibly YES
Major ETF movement and strength: Possibly Trending with strength

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Overall Picture

After touching 304.23 in yesterday's trading session SPY slowly lost steam to close the day at 303.20. After hours held nicely the 303 basically being in a 0.50$ range. The fact of holding here at those level could provide support for a continuation up wards. How price will trade @ 303 and 303.50 will dictate the trend for the day!

Today's Watchlist

Today I had on the wachtlist: MAT, ATVI, JNJ, CROX, GE and an eye on ENPH

MAT: Shares of the toy maker — which is undergoing a restructuring plan — surged 20% in after-hours trading Tuesday after it reported third-quarter results that breezed past Wall Street analysts’ estimates.Mattel MAT, +2.52% said it earned $70.6 million, or 20 cents a share, in the quarter, compared with $6.3 million, or 2 cents a share, in the year-ago period.Adjusted for one-time items, the toy maker said it earned 26 cents a share, compared with 18 cents a share a year ago.
MAT provided a nice move and gap in pm due to positive er release. I was following biased long for a continuation above pm high. Even if price broke pm high at the open it never provided a real support above 12.70.

ATVI: Top-Selling New Premium Game Release of 2019. Biggest Selling Digital Opening in Activision History. Set PS4 Record with Highest Digital Sales in First Three Days. Sold More Units in First Three Days Than Any Other Call of Duty Three Day Opening In This Console Generation. Biggest Call of Duty PC Launch Ever.
I had nice expectation on ATVI I had though that it would have found a move above the 56. I understand now that this kind of news is not that supportive as I had thought!

JNJ: JNJ stock popped late Tuesday after health giant Johnson & Johnson (JNJ) said new tests found no traces of asbestos in its baby powder. In after-hours trading on the stock market today, JNJ stock jumped 4%, near 134.30, in below-average volume. JNJ stock faced pressure this year amid a slew of lawsuits claiming asbestos in its baby powders caused people to develop cancer. Earlier this month, JNJ stock collapsed 6.2% after a Food and Drug Administration test found trace amounts of asbestos in a bottle of baby powder purchased online. Johnson & Johnson immediately recalled the lot from which the sample was taken.
Not the strongest news ever but still the fact of having the stock so close to the 200SDMA took my attention.

CROX: Crocs Inc. stock rose 5.6% in Wednesday premarket trading after the shoe company reported third-quarter earnings that beat expectations and raised its guidance. Net income totaled $35.7 million, or 51 cents per share, up from $6.5 million, or 7 cents per share, last year. Adjusted EPS was 57 cents, well ahead of the FactSet guidance for 39 cents. Revenue totaled $312.8 million, up from $261.1 million, and beating the $302.0 million FactSet guidance. For the fourth quarter, Crocs expects revenue between $245 million and $255 million. FactSet is guiding for revenue of $244 million. And for the full year, Chief Executive Andrew Rees said in a statement that revenue is expected to grow 11% to 12% year-over-year "based on the strength of our recent performance and start of the fourth quarter," up from previous guidance of 9% to 11% growth. That would bring annual sales to a record, he said. FactSet is guiding for revenue of $1.2 billion, implying 10.4% growth. For 2020, Crocs expects 12% to 14% revenue growth versus 2019. Crocs stock has gained 57.2% over the last year while the S&P 500 index is up 13.2% for the period..
CROX was definitely interestng in pm today.The low float though kept me a bit on the alert. I have tried to enter at 09:35 at the first micro pull back @ 36.80 but I was too fast and didn't have the time to set the order, it was already too late!

Play

GE

Company Description

Sector: Industrials
Industry: Diversified Industrials

General Electric Company operates as a high-tech industrial company worldwide. It operates in Power, Renewable Energy, Aviation, Oil & Gas, Healthcare, Transportation, Lighting, and Capital segments.

Trade Scenario

General Electric (GE) reported a surprise third-quarter earnings gain Wednesday morning as industrial businesses generated solid cash flow. The ailing industrial giant raised its full-year cash flow target. GE stock rose, moving toward a buy point. Analysts expected GE earnings per share to slide 14% to 12 cents, according to Zacks Investment Research.
GE earnings rose slightly to 15 cents a share, excluding many items. That's the first EPS year-over-year gain in seven quarters. Sales dipped 0.1% to $23.36 billion, slightly beating.

Trade Variables

Symbol : GE
Gap : 10% to open at 8.30%
RVOL : 3.27
pmVOL : 2 M
avg Vol: 54.7 M
Vol @ Day : 180 M by the close
Float: 8.7 B
Short Float: 1.32%
Institutional Ownership : 58.64%
avg ATR : 0.31
ATR @ Day : 0.33
History of former runner: NO
Long Term Chart : The stock traded below his major MA's through the entire month of October defining though An up trend marking higher lows and with the gap of today higher high's. A possible pocket testing the 10.35sh / 10.50sh resistance area could be a possible scenario. Above 10.75 and 11.28.
Major ETF movement and strength: From 09:39 till 10:03 GE had almost the same pattern of his major ETF with the difference that while GE popped up and held on the 9.80, XLI tumbled the pm gap to find support @ 78.90sh, level already tested in yesterday's session. Since then really similar behavior with GE. At 10:03 XLI dropped hard to retest again previous support @ 78.90sh but to keep back in few minutes his way to yesterday's low/pm high level. At 10:20 GE and XLI were trading at hod with again similar behavior.
pmPATTERN : Bull flag + 2 bull impulse up to 9.74. Pull back and consolidation on the 100 DSMA. Another impulse with an up-drifting formation and further consolidation 9.94/9.74. The stock opened @ 9.79
Catalyst : ER Beats

Technical Levels

Support: S1 9.75 S2 9.56 S3 9.42 S4 9.10
Resistance: R1 9.89 R2 10 R3 10.31/38
Inflection: 10 (I have consider the wrong level)

Trade Plan

GE traded nicely in pm supported by a sufficient ER release. Short % of float and Institutional Ownership don't influence the trade. I will keep me slightly tighter regarding size considering I can have better trading scenario then this.
I have have my eyes on it in case it would trade above the 10.

Set-up : Up-Trend Continuation on consolidation above inflection. Entering at the pullback
Side : Long
Size : 300 + 300 (from an original 400+400)
Entry : 9.960 / 10.01 (avg 09.99) / add 10.20
Takes : 10.13 / 10.18 / 10.26 / 10.31
Exit: 9.89 (start) / 10.10 (after avg, typo error)

Trade Analysis:

At first I didn't like the action on GE. We opened with a nice bounce promising good things but price rejected 9.96 slowly fading to 9.84 consolidating on the level. It took his way to hod and finally broke 10. I have realized at the open after the first rejection that I had considered the wrong level of inflection. I have excluded pm high due to the fact of having the 10 just few cents above. Though price responded as textbook to the 9.94. That was the inflection point, not the 10. I have adapted accordingly entering thus prior the break of the 10 and further pullback.

Intuit:

I have noticed that even if my pattern was not really there, the price action reacted at the same way when in my favorite pattern. The pattern occurred but below pm high thus not something I use to trade, the pull back below pm high.
This gave me enough confidence in entering the trade at the pull back after the pop above 10. I am happy to have gotten an entry at inflection even if I did the mistake to set it differently in pm.

Tape reading:

I have to admit that at first I have been a kind of hypnotized by the prints.. It was my first time handling a 8 B float stock! Jesus!!! I had to consider as avg order, 100*100 shares on the level 2! It actually gives a better read of it. Cause you can clearly spot volatility by the increase of the orders on the tape. Every up move and rejection has been confirmed by the tape. In the break of 9.94 providing good liquidity on the ask for a further move above but immediate control at 09:42 by the 10 offering huge orders. See the screen:

09:43 price gets to 10.05 to reject to 9.95. Here I have decided to find my first fill not considering that this could be the first shoulder of the pull back. When in the trade I haven't got any signal till 10.05 again. But this time price rose few more cents above it. The resistance at level has been less. 400*100 orders on the avg ask. I have consider it not enough for the price to break above, but I have been wrong, The tape never provided such avg traded shares after. The orders have been mild and thinner both bid and ask thus 400*100 avg order confirms a selling impulse. Cause I didn't realize we were going to reject I have set an order to add at 10. The break of the level let me then finally understand that price could trade lower, the 400*100 orders were the controlling point.
Indeed price rejected hard this time with an avg of 175*100 orders on the ask @ 10. Thinner just 3 cents above and liquid enough on the bid to provide a selling action. Bids were avg 200*100 at the moment, it could have trapped me in a bull continuation but that was not the case. Broke my entry I have let the price find support @ 9.94 thus hold my position.
09:56 price retests the 10 getting bigger bids. It has been quiet a war to get the 10. Failed it and trading 9.94 finally price found strength with a bid party @ 9.95 to bounce back. From 9.95 found support orders @ 9.97 and then it was 9.98 and then 9.99 and then boom above 10 to fill my first and second take @ 10.13 and @ 10.18
Followed the trade I didn't rely on the tape for me to add or take to my position.

Internalization:

I have changed the set I had prepared for GE due to the fact I have understood there was a mistake in considering inflection level. I have adapted accordingly with no hesitation or comment, what so ever! I have missed on focus when I have added @10.2

Orders:

Orders find fill when 8 B float supports! lol
I didn't add cause I use to add when on the 5 min charts occurs any pull back, but price went all the way up with no look back besides 10.15 and 10.25. Too many times adding on the 1 min support will result in sitting on a weak support that will easily break.

Comments:

I have left aside the need of trading a pattern. In the end we need inflection to show up and provide support for a further move, then it will all be adapting your entries and risk. I have for this reason told myself, ok is not your A+ but still there is fuel here for a move! I have traded less shares and I was fine with it.
I am really happy regarding the fact that I have broken the spell :D My last green trade was the 10/10/19
This trade is useful in relation to my takes. I have noticed that my profit takers are not that precise all the times. Since I add to my position and have a different avg results tricky to adapt then my takers to the new avg. I want to seriously start to work on when to take profits. I have a predefined set of takers but perhaps I should just take profits when price just goes against me. It occurs so often to be in a trade whit 7 consecutive green 5min candle but you have taken out profits. I have to work on this!
Cause I am backtesting the retest of inflection/point of control level I have shorted paper trading at 11:45 @ 10.08. It ended be the right view on it! Collecting as many back testing trades as I can prior starting with real money.

What I did not like about the trade:
I didn't like my add. It is really difficult for me to handle when I have my last piece of position open. I always add wrong. I always screw my avg. Today in addition I have done a typo closing the position when price got to my entry. I wanted to just set a stop order few cents below but by mistake I have pressed the wrong hot key.
Also at that point it could have been the opportunity for me to add to the position. Instead of adding at fresh technical levels that always break, if price already made a major move I have to wait and wait. Today I have missed another opportunity to rebuild a position.

What I have liked:
I have liked the intuit behind and the fact of handling a busy scenario at the open. Tried to enter in CROX it was too quit and missed, but still I didn't loose the focus on the names I was following.
I have liked that I have internalized my objective of 3 trades ago to include and rely on support area below my entry price if in the tolerated trading range. I will definitely when in an A+ Setup add another piece when price confirmed support ( this trade @ 09.95). Starting the trade with 3 entries.