This the type of set up that requires the upmost premarket preparation. BTU surged almost 20% on an earning pop as they reported coal sales not seen last since seven quarters ago, however, BTU is still expecting to barely turn a profit YoY. This begs the question that if BTU cannot turn a profit with record surging coal prices then how can they turn a profit once coal prices cool down, hence the double top formation coming into today and an opportunity for a short set up. Furthermore, that was also negative new flow from China about the hike in coal prices and the need to bring them back to equilibrium. The technical (double top, post earnings, extended from 5 SMA, overbought RSI) combined with fundamentals (negative news flow, bad guidance) turned this into an A++ set up and required me to put an a larger than usual core size, which I did not. I should have gone with 1000 shares easily upon the rest of VWWAP in the opening 5 mins. My entry was spot on but the size was lackluster. I was risking no more than 30 cents and that didnt even have to be case actually because I could have had two stop losses, once right above the candlestick where I entered and one above the breakdown candlestick 8:31. No matter the size this would have been a trade with very little stress.
Execution detail:
Date/time | Symbol | Side | Price | Position |
---|---|---|---|---|
2021-10-19 08:35:38 | BTU | sell | $18.700 | short |
2021-10-19 08:41:19 | BTU | buy | $18.080 | short |
2021-10-19 08:43:30 | BTU | buy | $17.820 | short |
2021-10-19 08:47:41 | BTU | buy | $17.595 | short |
2021-10-19 08:49:50 | BTU | buy | $17.088 | short |
2021-10-19 10:35:22 | BTU | buy | $16.450 | short |
2021-10-19 10:35:29 | BTU | buy | $16.450 | 0 |
2021-10-19 10:43:45 | BTU | sell | $16.475 | short |
2021-10-19 11:04:41 | BTU | buy | $16.640 | short |
2021-10-19 14:55:06 | BTU | buy | $15.865 | 0 |
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