SE Trade on Nov 12, 2019 09:36 from MarcoG: Tradervue User Stock Trades.

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 Gap Follower: Neutral
History of former runner: YES
Major ETF movement and strength: Trending
Catalyst : ER beats

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Overall Picture

By the end of October SPY is trading in all time high zone. Price consolidated for a week or so above the 306. Today in pm price held beautifully the 308.5. If price is able to hold this level SPY could continue moving up. In case the 308.5 would not support, 308 will be next target. Overall view: strength!

Today's Watchlist

Today I had on the wachtlist: AAP, ROK, OSTK and SE

AAP: Advance Auto Parts (AAP) came out with quarterly earnings of $2.10 per share, beating the Zacks Consensus Estimate of $2.07 per share. This compares to earnings of $1.89 per share a year ago. This quarterly report represents an earnings surprise of 1.45%. A quarter ago, it was expected that this auto parts retailer would post earnings of $2.22 per share when it actually produced earnings of $2, delivering a surprise of -9.91%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Advance Auto Parts, which belongs to the Zacks Automotive - Retail and Wholesale - Parts industry, posted revenues of $2.31 billion for the quarter ended September 2019, surpassing the Zacks Consensus Estimate by 0.63%. This compares to year-ago revenues of $2.27 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Advance Auto Parts shares have added about 7.2% since the beginning of the year versus the S&P 500's gain of 23.1%.
I had AAP on the watch with a neutral bias on it. The earning release hasn't been a bad one still beating estimates with a surprise of 1.45% and 0.63%. Those are good number, though the stock gaped down in pm 6.23%. My intake on the stock would have been to long it above the 200SMA or short it below its 100SMA, Price stayed in the range thus I didn't take ant trade.

ROK: Rockwell Automation Inc. shares rose 6% in premarket trade Tuesday, after the maker of industrial automation systems topped estimates for its fiscal fourth quarter. Milwaukee, Wis.-based Rockwell said it had net income of $8.1 million, or 7 cents a share, in the quarter, down from $345.9 million, or $2.80 a share, in the year-earlier period. The steep decline was due to fair value adjustments in connection with the PTC investments. Adjusted EPS came to $2.01, ahead of the $1.92 FactSet consensus. Sales were flat at $1.730 billion, but ahead of the $1.648 billion FactSet consensus. The company said it now expects fiscal 2020 sales growth of 2% to 5%. It expects EPS of $8.48 to $8.88 and adjusted EPS of $8.70 to $9.10. The FactSet consensus is for fiscal 2020 EPS of $8.48. Shares have gained 19% in 2019, while the S&P 500 has gained 23%.
I had nice expectation on ROK, the release was quite strong and pm pattern drafted a nice Bull Flag. The stock opened strong gaining 10 points after testing S1 and bouncing off the 198. I have entered SE thus I didn't follow ROK anymore but I have notice a nice pullback afterwards when price pulled back to pm high. I admit that being stopped in SE let me hold for a while prior entering ROK. I wanted the confirmation to hold the 203 pm high level. Price never held that while slowly faded!!

OSTK: OSTK: Revenue: $347.1M vs. $440.6M (21% decrease); Gross profit: $69.5M vs. $86.7M (20% decrease); Gross margin: 20.0% vs. 19.7% (35 basis point increase); Sales and marketing expense: $34.2M vs. $55.3M (38% decrease); G&A/Technology expense: $65.5M vs. $79.2M (17% decrease); Pre-tax loss: $34.5M vs. $49.4M ($14.9M improvement); Net loss*: $30.9M vs. $47.9M ($17.0M improvement); Diluted net loss per share: $0.89/share vs. $1.55/share ($0.66/share improvement); Adjusted EBITDA (non-GAAP financial measure): ($18.0M) vs. ($26.8M) ($8.8M improvement).
OSTK missed ER being hit hard by the news. I was following it for a fade below SSR level that was also the first support created once market opened. Once there I have prepared my order to sell it in case of a retest of the 8.60 Price broke wildly 8.60 3 times, reason why I have waited to find an entry. Indeed price got to retest 8.96 52 Weeks Low. Beautifully rejected that we have finally found consolidation on the 8.60sh pm level of low. My idea here was to short it in case of break and retest of the SSR. I am really happy for the insight I had here. I didn't enter cause I have done I think a mistake in waiting too long. I wanted to get more confirmations instead of entering already after the first minute price broke SSR and pulled! BTW I am excited by the fact that a new setup is coming more often at my eyes. The switch of inflection level is under my eyes now since a couple of month, I should now start trading it with a smaller starter position!

Play

SE

Company Description

Sector: Technology
Industry: Electronic Game & Multimedia

Sea Limited engages in the digital entertainment, e-commerce, and digital financial service businesses in Taiwan, Thailand, Vietnam, Indonesia, and internationally. It provides Garena digital entertainment platform for users to access mobile and PC online games, and eSports operations; and access to other entertainment content, such as live streaming of online gameplay and social features. The company also operates Shopee e-commerce platform, a mobile-centric marketplace that offers integrated payment and logistics infrastructure and seller services. In addition, it offers digital financial services to individuals and businesses, including e-wallet and payment services through the AirPay mobile app and AirPay counter applications on mobile phones or computers; and payment processing services for Shopee.

Trade Scenario

Sea Limited (SE): Total adjusted revenue was US$763.3 million, up 214.3% year-on-year from US$242.8 million for the third quarter of 2018. Total adjusted EBITDA was US$(30.8) million compared to US$(183.8) million for the third quarter of 2018.
SE was my favorite today due to the nice ER. The stock is strong in pm tracing those price action you select as favorite to grant a further smooth move continuing the main trend.

Trade Variables

Symbol : SE
Gap : 17% (perhaps the move already happened here in pm)
RVOL : 3.5
pmVOL : > 400 K
avg Vol: 3.5 M
Vol @ Day : 13 M by the close
Float: 342 M
Short Float: 1.32%
Institutional Ownership : 40.80%
avg ATR : 1.38
History of former runner: Yes
History of Gap Follower: Neutral
Long Term Chart : The stock has been trading in the 100 / 200 SMA range to break above the 100 today in pm. There is enough strength to grant a continuation upwards considering also that the 52 weeks high level is @ 38 and the stock is going to open @ 36sh
Major ETF movement and strength: XLK with the SPY are in a strong position trading all time high zone. XLK traded a new high in pm but opened @ yesterday's high. While XLK kept strength for the first hour of the day, SE didn't do as well. I have followed my trade and opened it also due to the strength XLK was showing.

pmPATTERN : Bull flag + up drifting pattern
Catalyst : ER Beats

Technical Levels

Support: S1 36 S2 34.23 S3 34 S5 33
Resistance: R1 34.75 R2 10 R3 10.31/38
Inflection: 36 (I have changed it to 36.40 after market opened)

Trade Plan

SE traded nicely in pm supported by a strong ER release.
I would trade the first pull pack to pm high or any other level of support that will be formed after market opens. In this case I have adapted it to 36.40

Set-up : Up-Trend Continuation on consolidation above inflection. Entering at the pullback
Side : Long
Size : 93 + 93 (Today I have raised my risk to 100$ from a previous 60$ then 80$.
Entry : 36.47 / 36.13
Takes :
Exit: 35.80

Trade Analysis:

I have loved the nice push occurred at the open on SE. After a little fight the first 2 minutes price finally got the trend direction. Started to pull back I have set my order few cents above previous high of 36.40. I have done the mistake here to don't wait for the first shoulder to form as I usually do. That would have been a confirmation of price getting strength and could have grant me a better entry price. Though the price formed @ 36.50sh the first shoulder and also the head. As known the right shoulder will be the one that will confirm or not the trend continuation.

Intuit:

I have noticed the pattern and told my self when entered with the second entry that the formation could fade any moment cause even if creating bullish patterns didn't still mark any new high but a triangle formation. As expected price faded but didn't bounce back as we would like to see in this kind of scenario. I have there decided to close my trade to don't make out of it a red trade above 1R.

Tape reading:

I didn't have the opportunity to spot anything relevant by the tape :(

Internalization:

I have failed in adapting my trade to what price needed to do. My first entry could have been avoided and also the second. A doji in a pull back is not a sign of strength to push back price from where it fell. I think this is the result of not have opened a trade in 10 days (for any kind of reason), the extreme will to trade leads to this. I admit I feel frustrated of not trading through the entire day and limit myself to the open basically. I am finally getting to trade other setups to don't exclusively rely on just one and only one. Distributing my trade activity in more then one trade a day will also distribute my risk. I didn't realize though all this while entering the trade but only after wards.

Orders:

Psychologically speaking I am satisfied by my detachment from the trade. I remember when my heart bit was getting so fast to completely block me. Today I make considerations in the mean while I set orders and the bit of my hearth does not speed up anymore. Yoga it's a wonderful practice that should be taught in school since we are kids.
Under the technical point view my orders suck! I didn't have to enter the trade at those prices.

Comments:

Today I admit has been the worse day since long now. It was long I didn't feel that negative. I have found by the yoga class a bit of self compassion and self estime that since I am trading it's on a sever test. When you do what you should do (in relation to study, patience, controlling greed and fear, adapting and changing your life to achieve your goals) the lack of results could definitely destroy your stability as person. When you do what you should do the lack of results could definitely tell you that perhaps you are not really doing what you should do!
Luckily red trades occur, luckily our limitation as human being is tested on a hourly basis every day of our life. Once there, it's only up to us to choose on which side to be! It's only up to us to make out of an experience a point of acceptation of our limits and at the same time a moment in which deeper analysis will refuel our strength. I am not gonna stay on a single trade, on a single day or even on a single year. Here we run for the entire life, the marathon of our life!

What I did not like about the trade:
I didn't like the excessive will to trade thus entering perhaps when not everything really aligned as A+ trade. Tomorrow I can't be trading the open (first time since March :P) cause I have to retrieve my new Passport at consulate. This also affected my will to trade.
My exit has been close to where price found consolidation, I didn't have to add while I had to close my position already at the big drop @ 36.

What I have liked:
I hardly find points I have liked. Perhaps the stock selection and the eye on OSTK, that was a great call!