LCID Trade on Nov 1, 2021 08:37 from Rolling-Bubbles: Tradervue User Stock Trades.

LCID remains in play with its elevated RVOL and clean price action. Today was a sell the news typa day for LCID as LCID started the deliveries of their first luxury EV. This helped raise the stock well above the 5 SMA last week and set up the extension play today. With TSLA making ATHs and gamma squeezing, EV names will continue to be in play, so it is crucial for me to stay on top of these names and this story. So far its mainly a story of American own companies with the likes of FORD also joining the trend. The price action was clean as LCID came into today forming a symmetrical triangle, contracting between 39.7 and 33.1. In the premarket, LCID manage to breakout of the triangle only to find supply where it found supply on Friday near the 41 dollar level.
The goal for the play was too to look for supply at the 41 level and see if LCID would break through the support formed at 38.5. Support held almost four times at 38.5, so a break would obviously be meaningful. The main target price for the play was the support at 35.5 but S1 was basically the apex of the triangle that lcid formed last week. As expected, the apex is also where there was the value area on the volume profile.
Overall I think I handled this set up well and captured the points I had set out to catch and what the play could have offered me but I could have done better with my sizing. There were enough clues in the price and volume set up to give me conviction to add more size at good r/r levels to squeeze as much as alpha as possible from this set up.
For starters, price opened up 4-5 ATRs above the 5 SMA, this was a big plus and a reason to look closely for a short set up. Then, we also saw the clear supply level at 41s and luckily enough we got a double top formation in the premarket. So a break below support levels with confirming overhead supply should give me more conviction. It just makes sense and feels textbook for this play.
I think my first entry was appropriate. As LCID found rejection below 38.5 (premarket support) I added my first risk, about half of desired size for this play. At this point I was looking for confirmation in the volume, I had to see whether or not sellers were picking up steam on down levels or not and whether the up moves being done on low volumes. But instead we got a situation where the volume bars ended up showing a balance fight between buyers and sellers. Volume was not even really low during the altercation. LCID tightened up in a box like formation with volume bars showing no bias. At 8:56 volume picked up after 10 mins of dried up volume. This is where I added another quarter to my size. Oh, i forgot to mention but I also took half a size off at 38.01, so adding a quarter size at 8:56 did not move my r/r, my stop loss remained the same.
The key moment happened at 8:58-9:01 when LCID formed big wicks on the min chart near 37.7 and 37.9 area. The volume for these bars was also muted and decreasing. At 9:01, it seemed that the bids had been absorbed because the 9:01 bar accompanied with increasing red volume bars. This is where I needed to be in overdrive I think and have atleast 500 shares to get to my full size. At this point, all the clues are pointing at the path of least resistance being downwards. I could have added 500 shares here I think and have my full size at 750 shares...