JD Trade on Jan 5, 2021 15:45 from Marius: Tradervue User Stock Trades.

Markets recovered overnight and into the session from the Monday sell-off. Strength across the board but more notably in the energy sector. There was news of former CEO of Alibaba being seen again ending the whereabouts since the Chinese governments investigations on certain companies. This was reflecting positive reaction seen on the HSI, FXI, and into individual names.

Fundamental Analysis

JD is part of the consumer discretionary sector and internet + marketing retail space of China. It is also a well known company with a 148.14B market cap. This is the same space as BABA which is taking in more heat at the moment with the investigations. Currently showing more relative strength. With the tier 3 analyst upgrade today there was a large inflow of orders having the stock break into ATH's

Overview

Price Targets

Estimates

News + Options Activity

Quantitative Analysis

Intraday Fundamentals

RVOL 2.678
AVOL 11.584M
ATR 3.41
Short Float 2.38%
Shs Float 1.33B
Inst Own 47.90%
Market Cap 148.14B

Options Statistics + Tape Reading

SI 3.479
IV 49.64%
IVP 42%
P/C 0.251
VWAP 93.624

Unusual higher call volume today indicating bullish direction noted in the news above and well shown in the orderflow. Keeping in mind the current directional flow and the noted weekly expiry. This can be shorter-term but price has broken into ATH's with the volume. Tape started to pick-up at the end of the day and noting the offers lifting + velocity accelerating a few minutes after entering in my position with the shorter-term compression breakout. Tape and execution details below. Spotted some offers lifting and decrementing into the close and breakout. A large amount of volume into the close as well. Still have to work on this skill and need to attach a chart into the recording.

Options Positioning

OI 633
VOL 291
Delta -.03
Theta -.05
Vega .01
Gamma .01
Prob T 6.02%
Prob ITM 3.06%
MMM +/- 4.638
IV Series 60.72%

90-100 Call strikes seeing higher relative volumes than the existing OI done today. Also representative in order inflow as seen in the shares RVOL. Went with a position based on my prior discretionary analysis process makes more sense. Recently I have been using the models to re-position and narrow my strike(s) but It doesn't seem show the best development as of yet. Staying within my own R/R parameters but still adding additional data points to use and then continue to adjust positioning.

Social Sentiment Quantitative Model

Noting the increase in sentiment from from mid day to end of session.

Technical Analysis

Daily chart on the year seeing the IV in middle range but again in relative terms using last years bear market correction. Lower compared to the last months. More volume today placed on the ASK and reflective with the close in the upper range of the daily possibly implying continuation into tomorrow and week.

130m time frame looking back from the Sept sell-off. VPOC at 82 + 86. Price did close at ATH but in prior history seems there is a lot of pre/post market activity.

Trade/Risk Management & Review

JD opened lower with initial selling and flush. I had alerts trigger with Y support 93.25 and 61.8% fib/algo retrace 91. My position stabilized until breaking news came out that the US was to add BABA and TCEHY on the ban list. Initially I was not aware of the news but saw the deep sell off on the candle and volume that retraced all of yesterday's move. The dynamics and risk parameters have changed significantly. I hit out with an acceptable loss which was pre-planned. This is the second trade in the last 2 weeks with Chinese companies that I have incurred a drawdown due to rapid reversals after initial momentum news. Will be eliminating these from playbooks for the time being seeing the characteristics that does not fit the favorably trading process I currently have in place. I can either modify the trade process or filter out the trades that are not fit. The latter is the best solution.

What I additionally did that was not efficient to the system was getting back into the trade and considering salvaging the trade idea in the same direction. I paid more to get additional info and thought we would recover and trade higher. 88 was my risk defined level where I originally hit out and used again. EOD we traded back into 88 and realized that the market was also shifting. Large cap tech's were dragging since earlier in the day.

Part of the failure of missing the big picture was that I did not do my pre research and run down of checks and updates before getting on the desk. I was originally monitoring from mobile while attending other urgent unexpected matters outside of trading. I also recognized I was on a little tilt when managing the trade. My level 2's weren't showing data on BABA or JD initially which was out of the ordinary as well and had to restart. The market reminds you of that when you are not in your specified parameters of operating. This prevented me from being flexible with the trade and possibly flipping the position. It also was not in my favor that I was in an unfavorable state and that my process was incomplete.

A reminder of the trading process as 2021 opens but simple solutions and corrections in place here. My other trade in ES_F was executed well and profitable. I think it was okay managing 2 large positions starting the week/year. Can definitely retry but keep in mind the process and external factors I don't have control of. And to stop and recognize when this is occurring.

Overall grading factor is a C for not executing adequate exiting/risk management + re-entry processes.