CHGG Trade on Nov 5, 2019 09:42 from MarcoG: Tradervue User Stock Trades.

Consolidation & Pull-back play above pm high on ER Beats!!

Requirements:

Gap : >2.5%
RVOL : >1.5
pmVOL : >50 K
avg Vol: > 1M
Vol @ Day : >500 K
Long Term Chart : Possible Pocket or trend already defined.
Float: >20 M
Short Float: Possibly >40%
Institutional Ownership : Possibly > 100%
History of former runner: YES
Major ETF movement and strength: Trending
Catalyst : ER beats

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Overall Picture

SPY is trading in All Time High zone. At those levels pullbacks I guess would be an usual common way for price to confirm his consolidation at new levels. Ergo I presume that based on yesterday's levels we could identify strength or weakness. SPY in pm touched all time high level of 308.35 to fade consolidate prior the open just 20 cents below the 308 level. Possible moves could be retest of yesterdays levels @ 306.70 (pm low) and 307 (yesterday's low) or break and consolidation on the 308 for a further continuation.

Today's Watchlist

Today I had on the wachtlist: SHAK, ADBE, UBER and CHGG

SHAK: Shake Shack Inc. shares fell in the extended session Monday after the fast-food restaurant topped Wall Street estimates for earnings but not for same-store sales or its outlook.Shake Shack SHAK, +1.74% shares dropped 14% after hours, following a 1.9% rise in the regular session to close at $84.30. In comparison, the S&P 500 index SPX, +0.37% finished up 0.4%, for a 23% gain on the year, while Shake Shack shares are up 85% over that period.The company reported third-quarter net income of $10.3 million, or 31 cents a share, compared with $5 million, or 17 cents a share, in the year-ago period. Adjusted earnings were 26 cents a share. Revenue rose to $157.8 million from $119.6 million in the year-ago quarter. Same-store sales, however, rose 2%. Analysts surveyed by FactSet had forecast earnings of 21 cents a share on revenue of $156.9 million and a rise in same-store sales of 2.5%.
I have selected SHAK for a down trend continuation below pm lows @ 68.35. I have to say I have completely missed the point on this stock. The presence and retest of the 200DSMA should have been the best interpretation on the stock. Even if in pm I didn't expect the stock to trade the 200DSMA again I had to adapt accordingly. It has been a great opportunity that has been missed here. Rejected the 200 as many stocks in this kind of scenario do. I have definitely to start to add more setups in my trading practice. At least those that respondes to certain particular variables and conditions.

ADBE: Adobe shares were rising after hours Monday after the company forecast earnings for its next fiscal year above expectations.The company provided guidance for its fiscal 2020 of $13.15 billion in sales and $9.75 of adjusted earnings per share, compared with the Wall Street average analyst estimates of $13.14 billion and $9.70, respectively..
ADBE traded higher touching 295 in pm. The er release was quite good even if not super. I had it for a long above pm high. The stock faded at major level of support traced in pm @ 288.50 and gained back the loss. Instead offered a great opportunity rejecting and pulling back off the 100DSMA. Another setup that I should start to work on! 286.81 level became clearly a point of control that I should have taken advantage of.

UBER: Uber Technologies Inc. reported another mega-loss on Monday, but its chief executive said there is a light at the end of the profitability tunnel. The ride-hailing service reported a third-quarter loss of $1.16 billion, or 68 cents a share, compared to a $986 million loss in the same quarter a year ago. The Q3 loss included $401 million in stock-based compensation. (The company’s official lockup period begins Nov. 6, when more than $20 billion of its stock hits the market.).
Uber with ER miss was on watch even if doesn't have from my point of view a good history of big runner after er. Today just confirmed that! I haven't shorted the pullback @ 28.70( R2 level cause I really didn't like the price action there. I was right this time :)

Play

CHGG

Company Description

Sector: Consumer Defensive
Industry: Education & Training Services

Chegg, Inc. operates direct-to-student learning platform that supports students on their journey from high school to college and into their career with tools designed to help them pass their test, pass their class, and save money on required materials. Chegg, Inc. was founded in 2003 and is headquartered in Santa Clara, California..

Trade Scenario

Q4: Total Net Revenues in the range of $122 million to $124 million, Chegg Services Revenues in the range of $107 million to $108 million, Gross Margin between 77% and 78%, Adjusted EBITDA in the range of $43 million to $45 million. Q3:
Total Net Revenues of $94.2 million, an increase of 27% year-over-year
Chegg Services Revenues grew 28% year-over-year to $69.3 million, or 74% of total net revenues, compared to 73% in Q3 2018. Net Loss was $11.5 million. Non-GAAP Net Income was $23.8 million. Adjusted EBITDA was $23.1 million, number of Chegg Services subscribers, an increase of 29% year-over-year: 2.2 million and 138 million: total Chegg Study content views

Trade Variables

Symbol : CHGG
Gap : 14%
RVOL : 4
pmVOL : > 200 K
avg Vol: 2 M
Vol @ Day : 8 M by the close
Float: 115 M
Short Float: 17.76%
Institutional Ownership : 110.47%
avg ATR : 1.27
ATR @ Day : 1
History of former runner: Yes
Long Term Chart : Touched and bounced off the 52WLow gaped in today's pm session aiming for 37.50sh 200DSMA
Major ETF movement and strength: XLI opened quiete strong today in accordance with SPY and other ETF's. Basically the chart at least up to the moment I have taken the trade was almost the exact same. XLI found support at yesterday's close and also low of pm session but then got the strength to perform. By the low got 0.60% move upwards. CHGG didn't have same strength today. Curious to see how price will move, an institutional ownership of 110% could imply no more borrows available.
pmPATTERN : Bull flag +up drifting pattern. Found consolidation 32.90/34.30 opened the session @33.95
Catalyst : ER Beats

Technical Levels

Support: S1 33 / S2 32.83 S3 31.78 / S3 31.11

Resistance: R1 34.30 / R2 35.21 / R3 37.28/74(MVWAP/100/200DSMA)

Inflection: 34.48 (changed from 34.30 R1 after the first 2 minutes market had already opened)

Trade Plan

CHGG traded quiete nicely in pm responding to almost all of the variable that would identify it as Playbook trade. Besides the short float just 1.80% I am quite positive on a possible up trend continuation. Break and pull back to inflection will be a possible area for me to find an entry!

Set-up : Up-Trend Continuation on consolidation above inflection. Entering at the pullback
Side : Long
Size : 70 + 70
Entry : 34.43 + 34.01 avg 34.25
Takes : 34.88 / 35.30 / 35.72 / 36.14
Exit: 33.83

Trade Analysis:

At first I didn't like the fact that price action broke down the pm high previously broke up in the first minute of the day. After the first 2 minutes I have adapted my thesis accordingly setting 34.48 as inflection. I have thus traded based on that.

Intuit:

Price found support on the 33.55 to bounce nicely marking a new high for the day @ 35.55sh. I have liked the rejection and set my order at inflection but didn't consider at all the 33.55 level of support.

Tape reading:

I didn't make use of the tape for the trade, I was really focused on the chart identifying and interpreting leves just denied and newly signed.

Internalization:

Once adapted my new level of inflection based on the first minutes action I didn't hesitate to set an order for me to spot a nice entry.

Orders:

Here comes the fun :D When clicked on the buy button I have got a message by the activities' messages box stating: insufficient buying power. At that moment I have said myself literally this: WTF is going on here?? I have checked my liquidity cause I don't have it displayed on any windows in my broker and verified that I had at the moment of the trade a buying power of 75$ lol!! I have thus called my broker to ask about that and they have recognized that there was a problem on their side in relation to my liquidity. The issue was fixed in 3 minutes and got back my capital to trade :) At that time thought it was too late for me to enter in CHGG.

Comments:

I am not happy about what happened today with my broker cause it was a great opportunity for me. Not pnl related while with the handling of my stop order. Price got just 7 cents below my stop in a very decisive manner to bounce back above (my stop). Basically i could have had the chance to still stay in the trade and I am curious to see what would have happened. I could surely lock first target @ 34.88

What I did not like about the trade:
I didn't like the fact I couldn't trade it. I didn't like that I did again miss a level of support just marked few minutes before. That would have been perhaps my second add.

I did not like to have avoided other setups through the day while they could have been handled with a different size. I have really to start to trade other setups to become a professional trader. I can't rely on just one setup in the very first 30 minutes avg of the day. I have to start include a different practice, that will be trade all the setups I am now back-testing since a year with low size to radicate new fundamentals in my trading activity.
At last but not least I had to consider that perhaps 110% shares held by institutional ownership with such low level short float could imply the fact that huge offers are settled.

What I have liked:
I have liked the fact of adapting my trading to not only a single pattern but to an overall scenario. I still need to adapt to those points I have marked as improvement that are coming out lately.

I have traded different ER seasons in the last year or so. Trends were more defined giving nice support for bigger moves while this time even if I have lost many opportunity, I don't really see great trend continuation moves occurring. At least I haven't been able to spot not so many of them.
I am holding tight until a good trade will occur. Hopefully some better action will occur in the next days.

11/07/19
Today one minute prior the open I've lost the internet connection and got it back only after 20 minutes. When I have seen QCOM (entry ready at pullback to pm high @ 90.34) and BIDU (entry ready at pullback to 116.50), my first 2 choices today respecting perfectly my prep plan I went nuts (I even have the recording lol)!! I have never got pissed like today before. I am never pissed for a trade bad managed or for a red one but when the issues are created by external factors, such as internet, broker problems and whatever not related to me and the trade I really hate it!! I think I am gonna purchase an Internet Hot Spot for me to cover this kind of issues and be able to keep trading.
BTW I couldn't believe that was really happening. Lately I have been passing sooo many issued not caused by me but from other factors that I am starting to realize that perhaps those external factor are part of the game and have to be included n a possible eventuality that I might face even in the future. Only way to survive is to be organized for any eventuality, I don't see any other solution!