LOW Trade on Nov 20, 2019 09:46 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

SPY today is gaping down in pm got to fill the gap with a quick spike (I don't even think has been really traded that price) and rejected it) Found consolidation on the 310.80 got to open basically @ yesterday's low 311.22. We are trading just the lows of yesterday's session. We might perhaps be in a retest that could imply some sell.

Today's Watchlist

Today I had on the wachtlist: TGT, PDD,URBN and LOW. Still following KSS and LK

TGT: Shares of Target Corp. soared 8.8% toward a record high in premarket trading Wednesday, after the discount retailer reported fiscal third-quarter profit and revenue that rose above expectations, and raised its full-year outlook. Net income for the quarter to Nov. 2 rose to $714 million, or $1.39 a share, from $622 million, or $1.17 a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share grew to $1.36 from $1.09, well above the FactSet consensus of $1.19. Revenue increased 4.7% to $18.67 billion to beat the FactSet consensus of $18.45 billion, as same-store sales rose 4.5% to exceed expectations of 3.7% growth. For the fourth quarter, Target expects adjusted EPS of $1.64 to $1.74 and same-store sales growth of 3% to 4%, compared with the FactSet consensus for EPS of $1.65 and same-store sales growth of 3.3%. For 2019, Target raised its adjusted EPS guidance range to $6.25 to $6.45 from $5.90 to $6.20. The stock has run up 67.7% year to date through Tuesday, while the SPDR S&P Retail ETF has gained 7.2% and the S&P 500 has climbed 24.5%.
TGT was a good name today, nice ER and nice pm pattern. Everything was set to perform.
Unfortunately by the time TGT did exactly what I have planned for me to trade (break and pullback to 121.50) I was already in LOW. Pity!!

PDD: Shanghai-based Pinduoduo reported an adjusted loss of 20 per share as revenue jumped to $1.05 billion. Wall Street expected an adjusted loss of 8 cents on revenue of $1.06 billion.
PDD with er miss was on watch for a bounce off the 100SMA. I am back-testing this setup and today this name was with a perfect alignment for it to be tested. Great response off the 100SMA needing 40 cents range below the 100SMA @ 30.67. Happy to have got another confirmation by the setup. Soon I might start trading it!

URBN: Urban Outfitters said earnings for the three months ending in October came in at 56 cents per share, down 20% from the same period last year and just shy of the Street consensus forecast of 57 cents. Group revenues, the company said, fell 1.4% to $987.5 million, again missing analysts' forecasts of a $1 billion tally. The retailer also added the inventories increased by 17.7% from last year, as of October 31, but noted that comparable store sales rose 3%, and are trending higher into the holiday period, allowing the company to put a brave face on the stock's disappointing earnings reaction.
URBN was on watch for the same reason of PDD. Proximity to 100SMA level broken in pm with a gap down of 17%. A retest of the 100SMA here was the scenario with the most probabilities to occur. Did it in part at the open hardly dropped to wonderfully bounce and get to test the 100SMA for several times. Price once got to trade that level @ 25.28 rejected several times providing entries for a potential short off the 100SMA. Good response also URBN in relation to my new setups.

Play

LOW

Company Description

Sector: Consumer Cyclical
Industry: Home Improvement Retail

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States, Canada, and Mexico. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It provides home improvement products in various categories, such as lumber and building materials, appliances, seasonal and outdoor living, tools and hardware, fashion fixtures, rough plumbing and electrical, paint, millwork, lawn and garden, flooring, and kitchens. It also offers installation services through independent contractors in various product categories; extended protection plans; and in-warranty and out-of-warranty repair services.

Trade Scenario

(LOW) today reported net earnings of $1.0 billion and diluted earnings per share of $1.36 for the quarter ended Nov. 1, 2019, which included non-cash pre-tax charges of $53 million further described below, compared to net earnings of $629 million and diluted earnings per share of $0.78 in the third quarter of 2018. Excluding the impact of these charges, adjusted diluted earnings per share increased 35.6 percent to $1.41 from adjusted diluted earnings per share of $1.04 in the third quarter of 2018.

Trade Variables

Symbol : LOW
Gap : 4.16%
RVOL : 3.9
pmVOL : 720 K
avg Vol: 4 M
Vol @ Day : 11 M
Float: 776 M
Short Float: 1.22%
Institutional Ownership : 77%
avg ATR : 2
History of former runner: Neutral
History of Gap Follower: Neutral
Long Term Chart : The stock for as much as it was breaking new all time high level didn't have a nice pm action. The overall view could be translated with a big ascending triangle finding a break finally today. But it was not the proper interpretation on the stock.
Major ETF movement and strength: XLK seems following the SPY on a smaller scale in today's pm. Trading below yesterday's low got to open 9 cents above. Not the same strength we've got lately but stil holding on important levels.
pmPATTERN : Perhaps this is a point of reflection here. The pattern hasn't been the usual I have used to trade. We got a drop in after hours down to 107.98 to bounce back and gap up 4.16%. Bull flag and consolidation opened @ all time high 118.23.

Catalyst : ER Beats

Technical Levels

Support:

S1/R1 118.23

S2 116.88

S3 113

Resistance:

R1/S1 118.23

R2 120.11

R3 None

Inflection: 120.11 (wrong, that was bearish point of control. that could be understood by the pm sell and by the weird 1 minute candle at the open followed by a consisten sell down to open price. but I was over the clouds apparently to don't consider it a good enough reason to don't even trade LOW today!!)

Trade Plan

LOW looked a good stock to be selected due to the open price just at all time level. The consolidation holding the level and a continuation could be a possible scenario to ind an entry.

Set-up : Up-Trend Continuation on consolidation above inflection. Entering at the pullback
Side : Long
Size : 80 + 80 + 80 (Filled first tier)

Entry : 120.150
Takes :
Exit: 119.52 (couldn't be higher then 119.20 got filled out @ 119.17)

Trade Analysis:

1) Price got at the open to spike 3 whole points and rejecting it wildly
2) Got to 118.37 just 14 cents above all time high it started his way back breaking and pushing above pm high @ 120.11
3) Found support price made a new high at 09:44 forming the head after the previous left shoulder @ 120.67
4) Showed the bulls power @ 120.67 giving point of control to sellers leading the price back to test 120.11. There was my entry.
5) Price formed the right shoulder but already heading lower and by the time I was thinking to it it already faded to my stop price. I have held giving it a little time to pull back as it always occur when the drops are fast and wild.
6) Price confirmed the pull back setting me back in the money. A doji was formed and price went to drop again and retest my entry from below. There I have implied a retest @ 119.50 already tested just few minutes before.

7) The retest occurred and even another pull back @ my entry price. Rejected for the last time got again to sit and break the 119.50. Stopped as soon as I could got a fill @ 119.17 just 1 point from my entry and 38 cents more then my original exit @ 0.62 cents

Intuit:

I have spotted the kind of formation I use to trade and adapted to it. Held for the price to test and fail, retest and re-fail and then find an entry if new highs were formed. The action was not the most evident but still it was a nice bullish descending wedge on the bull flag made from 09:35. This is why I have held it and gave it the time the first time to complete the wedge at his low 119.50. Price pulled as textbook and started a new continuation of the wedge to form a fake double bottom at 10 supporting just on the micro pull back of the bull flag impulse. Still we were trading between my entry and my exit. I didn't feel like closing it while I wanted to still be in the trade up to final denial of my idea.

Tape reading:

I have been reading the tape through the entire trade and this is the reason why still I didn't get out @ 119.50
5) 120.50 was a point were action took control getting fatter on the ask with some bigger orders. Sea of red on time&sale rejecting the level and drop. Pulling it back again
6) Price got to put me back in the money but we never had once sat above 120 accumulation of bids providing support through the up move. I have never seen that happening. That was a wonderful signal that action might end there dropping back retesting 119.50.

Internalization:

I have waited patiently for the setup to form. I didn't adapt my idea to the signals I was receiving. Fully followed the action reading the tape constantly I din't yet applied what I have deducted by those while still sticking to my main plain till it was valid.

Orders:

I have found a fill in an area was my planned one. Didn't find a fill at first I have just decided to leave it open and wait. Found a good response.

Comments:

The lesson I have got by this trade basically is on the fact that I have to adapt my trading style on the overall market scenario and adapt as soon as I get a signal by 2 trades or so. I explain it: I have traded in December 2018 edging on fades below VWAP with the SPY dropping hard. Held at the open my entries were mostly after 30 minutes or so. It worked until last week of December when SPY turned strong. In January I didn't edge on the fade below VWAP but longing/shorting at breakout of pm high/low. That last up to March when things started already to change and by May the breakouts didn't work anymore. In July we got some good opportunities to trade Breaks again and since half August or so till mid October any pullback would have held and get higher and higher. Now since er season kicked in SPY is in strong mode thus when a stock pulls back it's cause lost steam, the steam already given and showed by the open taking a straight up trend with no look back. If you catch the move at break you will get in otherwise waiting for price to pull will result in entering when the move already was given. This is not a rule obviously but with this I want to say that Breakout trades might be performing better in a strong/weak defined market while pullback trades might perform better in mild markets where a clear strong trend is not defined/confirmed yet.
Said that, this month is my first year birthday as a day traded. Got 1 year old by now in November. 1 year trading got me to report today that all the strategies I have tried to edge have to be now be put together, selected and form my daily trading practice accordingly to the overall market scenario, my intuit, instinct and experience. When I take more then 2 day losing in a row it usually means that I have to change approach for the next month or so cause the market his changing march. With the pullback it means that for more then 2 times in a row a strong stock supported with a strong catalyst and all the variables aligned didn't find enough buyers at the first pull back. That for me is enough to focus on the performance of the stock and adapt it for the next trading day. I hope I have explain it properly :P

What I did not like about the trade:
I didn't like the fact of have selected a stock with a weird pm pattern while there were others to be traded. I didn't like that I have focused on the wrong stock previously selected losing the point on my main stock TGT that as reported offered me a textbook trade.

What I have liked:
I have liked that I am getting to the conclusion that I have just to feel free to trade any strategy regardless any other psychological affectation such as one green trade and done, one trade per trade, one setup per time and all the rest. I did it for a whole year and by now I have about 4 setups I have traded at least with 40 trades.

Time to put a year of work together to start based on that working hard on what will guide me for the next year.