SHOP Trade on Jun 1, 2020 15:21 from tradelikelarry: Tradervue User Stock Trades.

Trade Planning:

• Daily Chart: Uptrend, Consolidation below ATH.
• TTM Squeeze: Daily
• Earnings Date: 8/5

Reason For Entry:

• Playing the daily chart, Put Credit Spread. SHOP is in a pattern of consolidation below its ATH. It has been in a strong uptrend and consolidating below a key psychological level ($900). The PCS has a risk to reward of almost 1:1 and I entered the trade at the buy zone (between the 8ema and 21ema). Watching for SHOP to continue its uptrend to new ATHs.

Reason For Exit:

• SHOP worked its way to the 78.6% Fibonacci Extension level and I closed the PCS for a 70% win.

Recap:

• The pattern was valid as price consolidated just above the 21ema after pulling back from a recent high. The TTM was in a squeeze at the time of the entry. This was a PCS play so I was betting that price would close over $750 by options expiration on 6/19/20. SHOP consolidated 9 trading days after my entry until it made a move to the 78.6% Fibonacci Extension level. I then closed the trade for a nice 70% win. These Put Credit Spreads are nice because time (Theta) is working for you. This gives the pattern plenty of time to develop and make a move in the direction you are betting.