BBY Trade on Nov 26, 2019 09:44 from MarcoG: Tradervue User Stock Trades.

Consolidation Squeeze play above pm high, All Time High Spike 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 started a new bull market tradings strongly above last days highs. The correction marked in the last days signed nice bottoms that formed a higher high formation. In yesterday's ah session SPY marked a new high to reject it in pm. But price recovered
to open basically at yesterday's high and close. It's interesting to notice how when in a strong market stocks and in this case SPY is closing days higher and higher. It can look like a stupid observation, but before internet traders were checking open, high, low and close to take their decisions in relation to market trend. Well SPY respected that principle as text book

Today's Watchlist

Today I had on the wachtlist: DLTR, NTNX, PANW and BBY as stocks with a fresh news,PDD and NVDA as second day, SQ and LK a beta stocks and CCXI as trading idea. I admit that even if I had several names on watch I have reserved my attentions to my fresh news stocks in play at least for the first 30/45 minutes of the day.

DLTR: Consolidated net sales increased 3.7% to $5.75 billion from $5.54 billion in the prior year’s third quarter. Enterprise same-store sales increased 2.5%. Same-store sales for the Dollar Tree segment increased 2.8%. Same-store sales for the Family Dollar segment increased 2.3%. The comparable store sales results at both segments were driven by increases in both average ticket and transaction count. Gross profit increased by $32.6 million to $1.70 billion in the quarter compared to the prior year’s third quarter. As a percentage of net sales, gross margin was 29.7% compared to 30.2% in the prior year. The decrease in gross profit margin was driven by higher freight and distribution costs, higher sales of lower margin consumable merchandise primarily in the Family Dollar segment, and shrink.
DLTR was setting up for a nice continuation play trade. Broke pm low @ 95.75 price pulled back and rejected/confirmed the pm low @ 95.75
I had a level of support @ 94.65, I needed that level to be clearly taken for me to take a trade at eventual pull back. When the action confirmed the plan I was already trading BBY.

NTNX: Nutanix stock rocketed higher late Monday after management disclosed better-than-expected financial results for the company’s fiscal first quarter. The enterprise cloud-storage software company (ticker: NTNX) posted revenue for the quarter ended Oct. 31 of $314.8 million, up from $313.3 million, and ahead of the Wall Street consensus forecast of $306.4 million. The company said that the flat year-over-year result reflects “revenue compression from the company’s ongoing transition to subscription and the significant reduction of hardware revenue from the prior year.”
I had NTNX as a neutral biased stock to trade. Too much resistance above and action in pm didn't confirm the strength we need to get an uptrend continuation. Just prior the open the stock rejected the buying impulse. Those buyers might not have represented them self at the open again. Broke my S1 level of support @ 33.89 the action didn't convince me to enter the trade.

PANW: Total revenue for the fiscal first quarter 2020 grew 18 percent year over year to $771.9 million, compared with total revenue of $656.0 million for the fiscal first quarter 2019. GAAP net loss for the fiscal first quarter 2020 was $59.6 million, or $0.62 per diluted share, compared with GAAP net loss of $38.3 million, or $0.41 per diluted share, for the fiscal first quarter 2019.
Non-GAAP net income for the fiscal first quarter 2020 was $104.8 million, or $1.05 per diluted share, compared with non-GAAP net income of $115.4 million, or $1.17 per diluted share, for the fiscal first quarter 2019. A reconciliation between GAAP and non-GAAP information is contained in the tables below.
PANW was on watch for a short below pm lows in case of pull back. The action has been quiet wild and quick. Once broken S1, the SSR level was just there to create some eventual issues. I have realized that there was not so much space for me to open a profitable trade in relation to risk/profit. The move below 228 has cleared already the entire tradable range and even if we pulled back I didn't feel comfortable to trade it.

Play

BBY

Company Description

Sector: Consumer Cyclical
Industry: Specialty Retail

Best Buy Co., Inc. operates as a retailer of technology products, services, and solutions in the United States, Canada, and Mexico. The company operates in two segments, Domestic and International. Its stores provide Computing and Mobile Phones, such as computing and peripherals, e-readers, networking products, tablets, and wearables, as well as mobile phones comprising related mobile network carrier commissions; consumer electronics, including digital imaging, health and fitness, home theater, portable audio, and smart home products; and entertainment products consisting of drones, movies, music, and toys, as well as gaming hardware and software, and virtual reality and other software products.

Trade Scenario

**Best Buy Co Inc. stock rose 4% in Tuesday premarket trading after the consumer electronics retailer reported third-quarter earnings and revenue that beat expectations. Net income totaled $293 million, or $1.10 per share, up from $277 million, or 99 cents per share, last year. Adjusted EPS of $1.13 beat the FactSet consensus for $1.03. Revenue of $9.76 billion was up from $9.59 billion and ahead of the $9.70 billion FactSet consensus. Same-store sales rose 1.7%, beating the 1.3% growth FactSet forecast. Domestic same-store sales growth was 2% while international same-store sales fell 1.9%. FactSet forecast 1.5% domestic same-store sales growth and a 1.1% decline internationally. For the fourth-quarter, Best Buy expects revenue of $14.75 billion to $15.15 billion, same-store sales growth of 0.5% to 3%, and adjusted EPS of $2.65 to $2.75. FactSet guidance is for revenue of $15 billion, same-store sales growth of 1.4% and EPS of $2.65. For the fiscal year, Best Buy expects revenue of $43.2 billion to $43.6 billion, compared with previous guidance of $43.1 billion to $43.6 billion, same-store sales growth of 1% to 2% compared with prior guidance of 0.7% to 1.7%, and adjusted EPS of $5.81 to $5.91, up from previous guidance for $5.60 to $5.75. The FactSet consensus is for revenue of $43.4 billion, same-store sales growth of 1.4%, and EPS of $5.75. Best Buy stock has rallied 40.2% for the year to date while the S&P 500 index has gained 25% for the period.

Trade Variables

Symbol : BBY
Gap : 5.86% to open with a gap of 4%
RVOL : 3.5
pmVOL : 505 K
avg Vol: 2.50 M
Vol @ Day : 9 M
Float: 265 M
Short Float: 3%
Institutional Ownership : 86.38%
avg ATR : 1.7
History of former runner: Yes
History of Gap Follower: Yes
Long Term Chart : The stock is just going to test All Time High after rallying since 10/03/19. Got to pullback @ 77.69 just 1 point or so from the all time high found back strength and support @ 72sh to gap up in today's pm session with the help of positive earnings release.

Major ETF movement and strength: XLY still not marked a new high despite market is dressed by strength. Though the etf traded at a good high level in pm session to presuppone a further continuation.

pmPATTERN : Textbook Bull Flag. No need to add any other detail. Buying impulse with a descending wedge. Nicely supported the bottom of the wedge to mark new higher lows prior the open.

Catalyst : ER Beats

Technical Levels

Support:

S1 77.16

S2 76.34

S3 74.49

Resistance:

R1 77.44

R2 77.69

R3 78.11

R4 78.53(all time high) / 78.60 (pm high)

Inflection: 78.60

Trade Plan

BBY is my only long biased trade,I prefer to go long thus it was my favorite today :P Nice pm pattern and over strength supported by the checks in my list. Interested only if price breaks and pull to all time high @ 78.53

Set-up : Up-Trend Continuation entering at pull back to inflection.
Side : Long
Size : 95 / 95 / 95 (Entered with 95 shares starter position, the stock gave me 1 take prior having the opportunity to add any other tier to the position)
Entry : 78.65 / 79.49 / 79.74 / 80.16
Takes : 79.43 / 79.95 / 80.47 / 80.99
Exit: 78.16

Trade Analysis:

1) I have noticed the strength on BBY at minute 3 by the open due to the spike exactly @ all time high.
2) Rejected the level price didn't make any new low but instead held the bottom marked by the first minute at 09:31 drawing new higher lows on the 1min chart.
3) Broke and sat on the 77.69 level of resistance price kept going toward all time high @ 78.53
4) Broken the level price literally found a basement on the 1 min time frame to grant a further continuation above, I have entered the trade.
5) Price got to test my next level of resistance @ 79.50 trading an high of 79.40sh to pull back giving me a good opportunity to add but I had my eyes somewhere else and miserably lost the opportunity.
6) Got to take my first take I had to wait for price to mark a new level of support for me to add shares. It occurred at 09:59 and I have had the opportunity to add.
7) Got to my 2nd take I have added again due to the retest of the freshly made level of support.
8) From now on I have struggled in managing my trade. My next taker was @ 80.47 but price took more then 10 minutes to trade it. The first rejection getting back @ 80 I have consider to take out some shares in case price would have confirmed trading lower. Here I have got a bit stuck cause 80 in the end has been a new level of support that gave opportunities to add to my position while I was taking some shares out for each time price crossed down the 80. For as much as it could still comfort me to don't leave that much unrealized on the table the practice here considerably resized my nicely built position.
9) Got to get filled for my 3rd taker price dropped hard and as usual I did the same mistake of adding when in a deep fall. Is a repeated movie that I trace on every trade I take. Ruined my avg committed the huge mistake of closing the position while 79.5 was supposed to be an important level of support that needed to be taken in consideration.

Intuit:

I have followed only 4 stocks closely at the open and this helped me so much in staying on the spot. I have committed already enough times he same mistake of following too many stocks at the open and then miss the all point. Price got to mark my entry levels, I have set my order the second time I have told myself: ENTER!

Tape reading:

5) Once in the trade 79.20 got a big accumulation on the ask and I was really losing hope that the stock would have traded higher, but I was wrong. Definitely I am happy to have not taken any choice out of that. Price got to test next level of resistance @ 79.50 trading 79.40sh as high. The accumulation on the ask found answer only after when price rejected the half dollar found again accumulation on the ask but actually it was not that big size orders. Perhaps the tape could expres in this way the tail/shadow of an impulse. The .20 has been sold, clear that, but it took .30$ to vanish the buying impulse. How could I spot that? The half dollar needs to be taken under consideration anyway as psychological level?
Price got to reject the half dollar to trade 78.80sh but I haven't been on the spot there. I have got distracted by reading the order flows on the tape and missed the main point. I still need to get my eyes away by the tape and check the chart every 20 seconds or so. When looking back at the chart I make again the overall picture clear and valid.
6) Price got to bounce off the 78.79 to go all the way and fill my first take @ 79.43.
7) I have to underline that it hasn't been easy to read he tape on BBY. I didn't really feel sure of what I was able to read. The overall print was quiet mild to me, no particular signs besides what I have just reported at point 5. Each tape has is own identity, today I have learned that there are those that does not have a particular personality, they are smooth and low pace. I need time to get on having an overall view on how on an avg stocks print on the tape.
8) Surely today we got accumulation on several points of control. Was not a clear order feeding on the ask and bid but still gave a different print that could be taken under consideration. 80.50 took a while to be broken and just there occurred the highest accumulation by the time I have entered the trade. 80 ended up being level of support but I didn't get anything by the tape.
9) I haven't been able to get any signal by the tape.

Internalization:

I have told myself first time: Enter the trade! I have replayed hold on. After 5 seconds or so I have told my self again "enter". I have acted accordingly. I have entered the trade. Missed final overview once price started to get against me at the end of the trade back @ my entry price. Over there I didn't have any internalization proces, just reacting to price.

Orders:

I have committed mistakes today in relation to my orders that resized my position and changed my avg price. I still keep doing this! I want to sign on a chart orders on a different levels. I do not want to see again an end of the trade in such way. I am getting tired of seeing this. I have reported repeatedly but still I lose the focus!
I think that the fact of having winners not so frequently does not help me in avoiding the wrong practices in my trading activity. I will repeat to my self over and over again once in a trade and in the driver sit to hold for the bigger pull that has to occur as per text book. All of the trades in an up-trend continuation I have taken, the successful one result to be on stocks with a strength above the avg, with those stocks price after have rally will most of the times pull back to main point of support (with BBY was just @ 79.50, clearly visible on the chart) to bounce confirming the strength. I have to visualize and internalize this prior the open during pm prep. Repeat it, repeat it, repeat it!

Comments:

The stock today has been really strong, I do not reward myself that much for the gain while for the pm selection. The trade didn't ask me any particular skill to handle it. Since my entry it never got below my price to test lows or my exit. It has been an easy walk fortunately :P
In those case I then focus on the way I have managed the trade if any point of improvement could be spotted. I see on this trade again as reported before the same mistakes when in the trade for a longer period. Lack of patience and missed reading the tape once at critical levels. I still need to practice being in trade for longer time providing the same level of accuracy and eye for details I have at the beginning of my trades. Surely I have committed in the past huge mistakes in relation to b/e stops and trade validity range but those are for the moment under control in every trade I enter. I repeat and repeat and repeat to my self in relation to my area through the entire length of my trade. My adds try to provide a proper avg according to price action, that's the reason why I avoid buying the breakout while the pullbacks cause I give my self more odds in finding an area of support when adding.
Possible solution to the lost of focus could be changing my trading posture after 30 minutes in a trade. I trade the open up to the first 2 hours of the day standing, I should start to sit and thus change my attention and focus after 30 minutes a trade is open. I will try anything to get to keep my focus longer while in a trade. Trading the open for most of my trading year led me to basically scalp my trades having an avg length of 20 minutes er trade, with trend continuation and position build up the focus required has to last at least several hours for each trade I am in, always in case the trade will give the opportunity to be in for 2 hours.

I meditate every week 2 hours or so, today I have decided to sit down and do it for 10 minutes prior the open believing that it would have helped me. I will repeat it again tomorrow!

What I did not like about the trade:
I didn't like what I have just wrote in the comments, a mediocre attention, focus and insight once in a trade longer then 30 minutes or so. Missed the rest of the move for no real reasons!!

What I have liked:
I have liked that I personally didn't really like my trade. I am super happy to have made for the first time 150$ on a trade, my best pnl($) ever but I am disappointed by my overall performance.

Additional Comments if any: 3 pnl does not mean a thing if I close a trade for no reason. I don't know how many times I will have to write it down for me to recall it when in a trade!! I want to draw a different management on the charts I trade, the only way to make it happening is to do it finding supporting pm prep activities and overall life style adjustments. I do not find any other way! I am aware about a terrible attitude, I report about it, I make considerations and find points of focus but I do not recall it when having the opportunity to apply all what planned! This can not be.
When I was a musician in my 20's studying at conservatory I learned soon that to play a certain score I needed to build it day by day, little by little. Making extremely clear where I was failing for me to build exercises that would have provided me those muscular/mental fundamentals required was a key point. Today it's like I am playing the tune wrongly every time I have the opportunity to perform on stage!
I am paper trading other strategies for me to start soon live and actually is a way for me to be more on the stage. Trading just 1 setup in a specific limited time of the day can hide many psychological implications behind the practice and being really limiting under the discover, improvement point of view. The fear of performing is something I have already faced :P lol It comes back to my life again, and I would never have immagined that associated with trading! I have made a trading strategies planner by time of the day pushing my self to take one trade per intra-day session. 1 trade within 09:34/09:45, 1 trade 09:45:01/10:30, 1 trade 10:30:01/15 and in the future perhaps being able to handle the close.