AMAT Trade on Nov 15, 2019 09:37 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 Gap Follower: Neutral
History of former runner: YES
Major ETF movement and strength: Trending
Catalyst : ER beats

---

Overall Picture

SPY in yesterday's session confirmed the range in which since some days now is trading. Bounced nicely off 308sh as it did 2 days before, price got by the end of the session to high of the day. In pm price kept trading higher marking a new all time high level. I would not discard a rejection at the open for long unwinding positions. In case so, once there, we need to see where SPY is gonna find support to identify a possible scenario for the day. Not having a resistance above price could basically just perform already at the open. Let's see. Though TLT traded lower in today's pm session and if I am not wrong means that some money have been removed by bonds to be placed in stocks considering the strength SPY is gaining during the last week or so. ADD still confirming a certain strength that now is present since 3 days to open today at new high. TICK as well opened at an high of 1400. Quite some strength there too

Today's Watchlist

Today I had on the watchlist: JD, GRUB, NVDA and AMAT

JD: Company reports Q3 FY20 GAAP EPS of $1.15 and Adjusted EPS of $1.16, led by strength at Walmart U.S., Walmart raises expectations for fiscal 2020 EPS. Net revenues for the third quarter of 2019 were RMB134.8 billion (US$118.9 billion), an increase of 28.7% from the third quarter of 2018. Net service revenues for the third quarter of 2019 were RMB16.0 billion (US$2.2 billion), an increase of 47.0% from the third quarter of 2018. Cost of revenues increased by 29.4%; Fulfillment expenses, which primarily include procurement, warehousing, delivery, customer service and payment processing expenses, increased by 12.8%; Marketing expenses increased by 7.6% to RMB4.4 billion (US$0.6 billion) in the third quarter of 2019 from RMB4.1 billion in the third quarter of 2018; Technology and content expenses increased to RMB3.6 billion (US$0.5 billion) in the third quarter of 2019 from RMB3.4 billion in the third quarter of 2018; General and administrative expenses decreased to RMB1.3 billion (US$0.2 billion) in the third quarter of 2019 from RMB1.4 billion in the third quarter of 2018; Net income attributable to ordinary shareholders for the third quarter of 2019 was RMB612.3 million (US$85.7 million), compared to RMB3.0 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholders for the third quarter of 2019 was RMB3.1 billion (US$0.4 billion), compared to RMB1.2 billion for the same period last year.
JD was on watch due to the earning release that beats expectations. I was long biased in case price would have confirmed a certain strength that didn't occur. I think I had the wrong plan with JD. Based on my experience when a stock trades and breaks all time high in pm with such strength will be more likely to fade at the open. I have missed the point here. JD popping up at the open and losing strength through the entire trading session just confirmed that. Though it offered a nice entry for the rejection at pull back to 34.75 level of support. I was in AMAT and I still don't trade 2 names at the same time.

GRUB: Shake Shack Inc. said Thursday that is now offering delivery nationwide through a partnership with GrubHub Inc. . Shake Shack said it would offer the service through GrubHub back in August, but warned of "volatility" as it transitioned away from other third-party delivery services like Postmates. To launch the nationwide availability with GrubHub, Shake Shack is offering the service free of charge through Nov. 17. And next month in Houston, Shake Shack and GrubHub will host an invite-only music and culinary event. Shake Shack stock has gained 36.2% for the year to date. GrubHub is down nearly 52%.
GRUB was on watch as per JD for a long above pm highs. As per JD the stock has never been able to hold the level of high marked in pm to fade down to yesterday's high.
The action has been quite similar to JD with the difference that GRUB at rejection of resistance levels didn't respect the levels as good as JD did. Not surprised to see then the stock double bottoming and reversing.

NVDA: Nvidia (NVDA) came out with quarterly earnings of $1.78 per share, beating the Zacks Consensus Estimate of $1.57 per share. This compares to earnings of $1.84 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 13.38%. A quarter ago, it was expected that this maker of graphics chips for gaming and artificial intelligence would post earnings of $1.15 per share when it actually produced earnings of $1.24, delivering a surprise of 7.83%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Nvidia, which belongs to the Zacks Semiconductor - General industry, posted revenues of $3.01 billion for the quarter ended October 2019, surpassing the Zacks Consensus Estimate by 3.87%. This compares to year-ago revenues of $3.18 billion. The company has topped consensus revenue estimates three times over the last four quarters.
NVDA was on watch with a short bias. The er release was with a mixed sentiment. Even if the company is recovering nicely, the overall condition is still not the optimal one. Pm action just showed that. Price after a spike up to 52 weeks high literally dropped rejecting the high giving a textbook entry once retesting the already broken yesterday's close level. It has been to the penny. I was in AMAT I didn't trade it. BTW today so many opportunities offered by the market, unusual to be a Friday day actually I don't perform good due to mostly lack of momentum/volumes. Today several names aligned for an A+ setup but too many together are not so easy to handle at least for me!

Play

AMAT

Company Description

Sector: Technology
Industry: Semiconductor Equipment & materials

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits.

Trade Scenario

**Applied Materials (AMAT) came out with quarterly earnings of $0.80 per share, beating the Zacks Consensus Estimate of $0.76 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 5.26%. A quarter ago, it was expected that this maker of chipmaking equipment would post earnings of $0.70 per share when it actually produced earnings of $0.74, delivering a surprise of 5.71%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Applied Materials, which belongs to the Zacks Semiconductor Equipment - Wafer Fabrication industry, posted revenues of $3.75 billion for the quarter ended October 2019, surpassing the Zacks Consensus Estimate by 1.91%. This compares to year-ago revenues of $4.01 billion. The company has topped consensus revenue estimates four times over the last four quarters.

Trade Variables

Symbol : AMAT
Gap : 7.09% to open at 5.75% gap
RVOL : 4
pmVOL : 340 K
avg Vol: 7.4 M
Vol @ Day : 23.5 M at 1 hour to the close
Float: 900 M
Short Float: 1.95%
Institutional Ownership : 81.50%
avg ATR : 1.23
History of former runner: Neutral
History of Gap Follower: Neutral
Long Term Chart : Since December 2018 Christmas crash the stock didn't look back setting an outstanding 120% performance. It was trading 28.79 in December 2018 today we traded the 60sh. It arrived to the earning release with a perfect ascending triangle there to be broken. Yesterday's trading session marked already a 52 Weeks high new level to keep running today
Major ETF movement and strength: XLK traded to a new all time high level in pm setting a gap of 0.54%. A nice support for the stock to hang on. SPY as stated before also marked a new all time high level thus the perfect scenario to grant a further trend continuation.
pmPATTERN : Bull flag and consolidation at the 59sh in after-hours. Pm opened with a tiny gap up that pushed price higher bottoming 2 times and finally breaking the top to touch 61. Rejected the high and settled on the 60sh level of support. Opened @ 60.26
Catalyst : ER Beats

Technical Levels

Support:

S1 60.25

S2 59.95

S3 58.76/64

S4 57.48/39 (yesterday's pm high/52 weeks high)

Resistance:

R1 60.74

R2 60.98(pm high Resistance)

R3 62

R4 62.40(all time high)

Inflection: 60.95

Trade Plan

AMAT is a stock that gave me in the past a great trade cause is able to keep a trend after earnings release. Not in its identity as a granted runner though is able when with the right variables to perform well. The overall market scenario is also the best I could expect to have I guess. What would set me for a long will be the confirmation at pull back of making new highs. I will hold to spot if after pulling back any new high will be priced, in that case I will try then to spot the best price accordingly to the range. Different from other trades I have taken up to today is the fact that I won't add against me if price does not make a new high but only after that would be confirmed.

Set-up : Up-Trend Continuation on consolidation above inflection. Entering at the pullback
Side : Long
Size : 100 + 100 + 100 (Entered with 100 shares starter position, the stock gave me takes prior having the opportunity to add any other tier to the position)
Entry : 61.01 / 61.68 / 62.030 / 62.29 / 62.4 / 62.53 / 62.55
Takes : 61.5 / 61.76 / 62.10 / 62.41 (This would have grant me, taking a quarter position each taker, a 3:1 pnl. I have got 3.24 pnl with way more orders, knowing that it does not exist the perfect way but just the one that suit to my personality, I would ask then myself to deeply understand my personality to achieve the best practice on taking out profits.
Exit: 60.70

Trade Analysis:

Initially I have lost my interest due to the hard drop prior the open but the bounce off the 60.20sh has been wow, basically the stock sat @ 61 in few seconds and kept running up to 61.80. From the low to the top the stock did his entire ATR. Considering a pull back thus a possible entry let's suppose 25% off the high, I will still have 1.25% or so to catch. Usually stocks with good ER might move around 2 times the ATR. Price pulled back from a top@ 61.80sh to get all the way back to 61 level of support, just few cents above it. Second minute pulling back price tried again to spike forming our left shoulder. Nicely respected price faded off that to make a new low, at least a new attempt that never has been lower then the previous. This was another nice confirmation. 09:36 price tries it again marking definitely the max buying limit for the moment with a new high (another confirmation)giving sellers control on the move. On the pull back I have tried to find my first entry as price was respecting the plan and an up trending formation. Filled @ 61.01

Intuit:

The fact of not making new lows but a higher high gave me the click to enter the trade. I am trying lately to distribute my entry in 3 orders thus I have set my first third of position in. Once in the trade I have held for a further confirmation by price setting a buying order a little above 31.01 just @ 61.09 but price never got there for me to be filled. I have realized that the trade would start with a poor size. I have made my consideration regarding this but it was already in my plan thus I didn't add at non sense levels just to be bigger. I have held for next pull back to next level of res/supp to add to my position.

Tape reading:

The tape gave me nice confirmations today. Bids accumulation and liquidity on the ask gave me good confirmations that price was going to trade higher. 200K order supported the 61 at 09:34/09:35 am. In addition most of the breaks out have been confirmed by prior accumulation of bigger bids against few spoofing orders on the ask. Constantly thinner on the ask and orders marked the newest levels of resistance making support for a further continuation. I have to admit that following the tape constantly I get a bit of fomo or better saying I have the tendency to react to what I am seeing. This could lead me i change the overall plan of holding for an up trend continuation rather then a scalp. Thus today I was repeating my self to don't consider the micro action on the tape while considering it when at critical and fundamental levels that would have deny my plan. It worked out well today.

Internalization:

I have reacting to the inputs I was receiving with a certain calm. I have appreciated my overall response in crosschecking my plan but I have failed hard in setting my orders. I have failed in double checking prior clicking my mouse at least 3 times today with 3 different orders.

Orders:

I have to admit that the distribution of my daily risk popped into my mind this morning in preparation of the market. I risk 100$ a day in one trade and mainly with 2 entries. What if distributing the 100$ in more then a trade or at least in 3 parts in the same trade? What if adding only on confirmation of a higher low and a higher high? This led me to confirm myself to use 3 different entries. Up to this stage I am fine, while in relation to my takers I have to work hard:

Take 2: 2019-11-15 09:51:44 AMAT -30 $61.760 (I have set my 2nd take @ 61.82 but I had a STOP order selected in my order entry window. I have got immediate fill, lucky I was at 61.75 just 7 cents below my main take.
Take 3: Same here. I didn't realize at take 2 the issue thus I have thought that there has been some slippage thus I have regularly set my 3rd take @ 62.22 but again immediate fill.
I got finally by then to understand the issue. I was really disappointed, a third of my position closed 50 cents prior the target due to a stupid lack of focus.
Held the 61.34 at 10:01 am (my avg price) once the stock got against me cause still 61.34 was in the tradable zone according to my plan. I have clearly told myself I won't do again the same mistake today. I am so happy to have reported that yesterday with much attention for me today to be on the spot and don't repeat what does not work good. I had luck that it occurred already by today, thus the day after, for me to have a chance and test me. One consideration I want to make here is that perhaps I could have added at my avg price. I had the opportunity to rebuild my position after have taken 2 targets. The point is that the second target was wrong thus I had even a major reason for me to add. I didn't, I was focus on holding the level like was me there below supporting with my body the price. I still need to practice. Today I have remarked this episode for me to remember on Monday to don't repeat the wrong practices. I had to add there cause price was still in the money even if I put my avg outside of the money. If I set myself outside is not an issue that price has to fix. Good to have held but wrong to don't have added once price confirmed to hold. I will keep it in mind.
Price got smoothly to fill my 3rd taker and there hasn't really been any opportunity to add any shares up to the taker. I had an order @61.77 that never found a fill.
I have decided to raise the order @ 62.03 considering first immediate level of support. Found a fill, price didn't get lower then 61.94 and took back getting to a new higher green candle but confirmed the pull back just few minutes after dropping to 61.81. That was a double top on the 1 min chart just below the 62.40 level of resistance. For this reason I have locked a piece @ 61.94 and another @ 62.035 to be then filled @ my original taker @ 62.37, and the second time it came below the 62 I have got one more @ 61.94. I have placed one more order just at 61.86 cause I wanted to lock in what was on the table (considering I was also undersized by the beginning and with a couple of wrong takers). It filled me @ 62.
And here comes again the same mistake setting an add order @ 62 that cause selected wrongly as STOP got a fill @ 62.29. Pointless to express my feelings here.. Same mistake 3 times in a row. This is the reason why the comments in relation to my take orders today are gonna be huge!!!

Price got to fill me @ 62.49 for one more take while I had and add set @ 62.21.

Price kept going and going breaking all time high finding consolidation just few cents above, I have thus decided to raise my add @ 62.40 finding a fill. I have then decided to set another adding order cause the stock has been holding perfectly the level with no particular indication on the tape that the scenario was going to change. My stop at that moment would be 62 with an average of 62.19.
Got my fill for my add @ 62.53 I have set my taker @ 62.94 for the whole dollar move but I haven't found a fill 2 times by 2 cents, order @ 62.93 and price got @ 62.91. For this reason when pulled back I have locked @ 62.76 and again @ 62.73. Stem was getting less and less and when we pulled back to 62.50sh half dollar I have tried to add some more shares but I din't have success. This last add has to be avoided is something I still keep repeating and repeating all over again. Is another point I remark for me to don't forget next time I will be in the same situation. Price got to my avg price and I have given it the space accordingly to my plan to get out below 62.30sh.

Comments:

Today it has been a great opportunity to add some more material of analysis. Perhaps the greatest opportunity so far. In relation to my size, to my orders, to my focus when in a trade that lasts longer time and to stops and trading area to be respected. I have got good and bad responses and basically is a good achievement for me to spot some good points. The consideration in relation to highs and lows for as much as it is guaranteed by me I realize only now that I never talk about those in my trading reports. It has to be in every trade I will take from now on.
The focus on the typo is calling my attention cause repeated several times in the same trade. I might focus so much on price and tape forgetting I have changed the order entry type. A reminder will help me in checking and checking before I click the mouse.
The size showed that I have to accept to add at a higher price at the beginning of the move/trade as soon as I have the opportunity. I have to add when still in the tradable range price wanna retest my avg price.

What I did not like about the trade:
Basically in the comments above and in the comments related to my orders I have expressed all what I didn't do well. I have missed quite some staff today in the execution of orders and focus.

What I have liked:
Today I am really satisfied about the fact that was only yesterday when I was reporting the mistake of closing a position when still your idea is valid. Today I had the opportunity to correct my wrong practice more then once. I am really happy about this!