WDAY Trade on Dec 4, 2019 09:43 from MarcoG: Tradervue User Stock Trades.

Gravatar

Shared by
MarcoG

 

Pull-back play below pm low/ inflection point on ER !!

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% (starting to be doubtful when short)
History of Gap Follower: Neutral
History of former runner: YES
Major ETF movement and strength: Trending
Catalyst : ER or Fresh News


Overall Picture

SPY after the hit in yesterday's session got to cover the loss in today's pm session. Trading the 311 has found a consolidation to pen the session at low of pm consolidation. Action seems to be still bullish continuing yesterday's trend

Today's Watchlist

Today I had on the wachtlist: ZS, WDAY, EXPE, GIII as names supported by a catalyst. SHOP as BETA name. APA as continuation. CLVS exclusively for the fade off the 200SMA. ROKU cause it is always moving, I might call it the stock of the moment, a moment that is lasting since long now. TTD was on watch due to the fact that in my opinion felt too much and too fast, many indicators showing that the stock might recover the losses. There is a nice pocket that could be filled.

ZS: Zscaler (ZS) came out with quarterly earnings of $0.03 per share, beating the Zacks Consensus Estimate of $0.01 per share. This compares to earnings of $0.01 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 200%. A quarter ago, it was expected that this cloud-based information security provider would post earnings of $0.01 per share when it actually produced earnings of $0.07, delivering a surprise of 600%.

ZS was on watch due to the earnings release. The release under my point of view was a beat and actuallly I was trying to figure out why the stock dropped in pm session. At the open we got in 2 minutes to the SSR level and bounce to consolidate just at level of support @ 48.05. The stock provided a good opportunity to enter at the retest of 48.65 pm level of low but at that time I have consider the bounce off the SSR as a big sigh that price could start by there is way up supported by the buyers that just have bought it few minutes before. I didn't trade it.

EXPE: CEO Mark Okerstrom and CFO Alan Pickerill have resigned, effective immediately.
I haven't been able to spot any other detail in relation to the news on EXPE. I had it for a long above pm high but the stock never got to hold the level for me to spot an entry.

GIII: G-III Apparel Group (GIII) came out with quarterly earnings of $1.99 per share, beating the Zacks Consensus Estimate of $1.95 per share. This compares to earnings of $1.88 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 2.05%. A quarter ago, it was expected that this clothing and accessories maker would post earnings of $0.22 per share when it actually produced earnings of $0.23, delivering a surprise of 4.55%.

GIII was on watch due to the earnings and for the fact that the 100SMA with the Multiday VWAP was just crossed in pm. I admit I have made a wrong plan on it. Beating estimates and just sitting and double bottoming by 10 o'clock, the stock got all the checks for a bounce off the lows and anyway for a long continuation. Indeed the impulse has been massive. Everything was wonderful besides the fact that I didn't trade it..

Play

WDAY

Company Description

Sector: Technology
Industry: Software - Application

Workday, Inc. provides enterprise cloud applications worldwide. Its applications help its customers to manage critical business functions and optimize their financial and human capital resources. The company offers Workday Financial Management application that provides functions of general ledger, accounting, accounts payable and receivable, cash and asset management, revenue management, and grants management, as well as project and resource management, time and expense tracking, project billing, revenue recognition, financial reporting, and analytics.

Trade Scenario

**Workday reported third-quarter losses of $115.7 million, or 51 cents a share, on sales of $938.1 million, up from $743 million a year ago. After adjusting for stock-based compensation and other expenses, the company reported earnings of 53 cents a share, up from 31 cents a share in the same quarter last year. Analysts on average expected adjusted earnings of 37 cents a share on sales of $921 million, according to FactSet, with billings of $939.9 million.

Trade Variables

Symbol: WDAY
Gap: 4.80% to reject 100SMA and drop making a down gap of 5.41%
RVOL: 1.4
pmVOL: 97 K
avg Vol: 2 M
Vol @ Day: 5 M
Float: 145 M
Short Float: 6.25%
Institutional Ownership: 99.59%
avg ATR: 1.7
History of former runner: Yes
History of Gap Follower: Yes
Long Term Chart: The stock doesn't really have space to move. Too much support below, not the best scenario we would like to have in a down trend continuation.
Major ETF movement and strength: XLK trading with an up gap in pm basically at before yesterday close. Surely got back all what given in yesterday's session
pmPATTERN: Spike at 100SMA and rejection to consolidate at close price and break again the 100SMA. Rejected once again the stock lost all of it forming a bearish triangle. Broken and retested the bottom from below, it definitely lost field and trade at low of pm.
Catalyst: ER Beats

Technical Levels

Support:

S1 164.10
S2 161.93
S3 158

S4 156.15 (SSR)

Resistance:

R1 165.04
R2 167.49

Inflection: 164.10 (I was wrong)

Trade Plan

WDAY is on watch for a possible down trend continuation below pm low

Set-up: Down-Trend Continuation entering at pull back to inflection.
Side: Short
Size: 30 + 30 + 30
Entry: 163.77
Takes:
Exit: 165.1

Trade Overview:

Analysis:

1) Price initially spiked exactly at yesterday's low to be sold dramatically. A typical scenario that occurs often when a oversold stock spikes up at the open.
2) The drop covered the entire opening range to break and get few cents from 161.93 level of support. At that moment pull back to inflection occurred and I have entered the trade initially missed for 1 cent I have found the minute after a fill . I have given it 4 cents range by the whip @ 163.81 thus my order was @ .77
3) Price rejected nicely my entry but it took 2 minutes to consolidate @ 164.30 and pop back and break my entry. I have decided to exit once the new high has been formed.

Tape reading:

I didn't have the opportunity to spot anything significant by the tape.

Orders:

I have set my entry accordingly to my idea

Intuit:

I have followed the action and traded the rejection of my entry price. It didn't occur.

Internalization:

I have respected the idea and managed my feelings quite good.

Comments:

Perhaps WDAY was not the best stock to select. The support below turned to really support buyers. In the end is what happened to all the stocks in my watch. Got to accept days like this one and the fact of not having a reversal strategy to apply. It has been lately the double bottom festival. So many double bottoms have worked and also gap down that simply easily sat on next level of support and boom up to break further above. Good point to work on here

What I did not like about the trade:
I didn't like that I have traded it even if I have reported in pm that there is support and an overall daily chop chart! I did not like that in the end on the 5 min chart the action has been clear. I have misinterpreted the move. A pull back occurred but not a 1 minute chart but well simply on a 5 minutes. I still don't know the limit in selling the very first pull back or holding waiting longer. A solution could be just try the 2 of them with a tighter stop perhaps. Work on progress here!!

What I have liked:
I have liked that I have managed several names better. I am getting better in following more names together.

Additional Comments if any:


Execution detail:

Date/time Symbol Side Price Position
2019-12-04 09:43:38 WDAY sell $163.770 short
2019-12-04 09:49:02 WDAY buy $165.100 0


Leave a comment about this trade!

You need to log into your Tradervue account to leave a comment. If you don't have one,
it takes just a few seconds to sign up, and it's free!

View plans, Sign up for free, or Log in