RIVN Trade on Nov 17, 2021 08:50 from Rolling-Bubbles: Tradervue User Stock Trades.

Naiiiiiiled it! the trade went just as i imagined it would but I did not have the patience for the confirmation clues to take place and as a result I chased the set up almost into oblivion Asana style until I came back into my senses and obviously the hard stop loss/maximum loss rule for the day saved my butt the past two days.
Anyways for a mean reversion, overbought set up like this where the entire sector is in play and we are dealing with a high flying, high ATR stock, it is of uttermost significance to wait for confirmation clues before putting on risk. The high flying, high atr, in the face overbought stock in a sector in play set up provides some of the best trading opportunities so its important for me to be patient with these plays in order to reap the most reward out of such an opportunity. Just because a stock a stock is overbought, does not mean it has to come down now. It is important to remember that the market can stay irrational for much longer than I can stay solvent.
The confirmation clues for this set up are whether or not the stock is below the previous day high, holding below vwap, and not reclaiming any important pivots. Until today, RIVN continued to open above the previous day high for four consecutive days after its IPO on heightened volume of the duration. There was no reason for me to even attempt a short until a break in this pattern. Support levels, which were usually the previous day highs, were constantly being held and finding aggressive buyers.
The overall context is crucial here because there is a lot of subtle things that RIVN did today that suggested what ended up transpiring pre-emptively.
- For starters the gap down below the previous day high was a change in character.
- premarket price action showed a new high at 180 bucks only for it to get strongly rejected and taken near yesterdays low at 155ish for the open
- 155ish was a critical level because that is where RIVN found "unusual" support yesterday so that was going to be the sticky price that I used as a pivot. Below and the sell off can pick up steam.
- Lastly, yesterdays gap up move can be considered an exhaustive gap up because it was the largest gap up move in RIVN since the IPO and was now gapping down

Price action ended up being textbook, in that the volume was confirming all the moves and I was able to enter/exit on the clues provided by the volume and retrospectively, my entries and exit ended up being decent, or as they should have been. After opening up below the previous day high and near the lows at 155ish where RIVN had found support, RIVN went quickly for a flush from 161-155, right where I needed it to be. This was done in the first two mins and wit elevated volume, in the first min at least. RIVN followed it up with a balance formation for almost 18 mins from 8:32-8:49ish. After forming the balance formation where support 1 was, a break below the balance was my clue to put on risk, risking the high of the balanced range. An A+ break is one that is met with volume right away, and thats exactly what RIVN did. The break at 8:50 was with the second highest volume bar of the day so far and it was early on in the min, by the 30 second mark the volume bar was elevating and therefore I put on my risk.
Now the risk with this play today was that from its premarket highs and the open, RIVN had basically traveled its ATR of about 25 points, this ma**de a deeper move to the downside less likely so it was crucial for me to be aware of that.** S1 for the play was 155 where RIVN spent the opening range. S2 was at 144 and S3 at 140. The move from premarket highs to s2 would be an almost 2 ATR move, which given the overall context is possible but still important be cautious about I think. The volume action in RIVN confirmed that because the volume really started to tapper off when RIVN reached s2 at 144 and then dried up even more after testing s3 at 140ish.
My exits were decent, I exited half the size when RIVN reached 150 and we got a bit of capitulating esque volume bar, this usually warrants a scale out cuz its usually followed by a rebound. Because RIVN had already traveled more than its ATR, the price targets were crucial and for me scale out at versus trying to capture more points which were not likely given the reason described.
As I see more n more of these mean reversion, overbought sector plays and how they play out, I will be able to increase my size on them especially if they follow those preemptive clues I mentioned above.
Now I caught the meat of the move, about a 8-10% move, which is around where my R multiple comes from, capturing 8-10% moves and risking 2-3% moves, but there are windows of opportunities to scalp while RIVN goes through its move. I don't see a lot of scalping opportunities in the first move to s2 at 144ish because that's where I am already in full size and I have not covered enough R yet for me to be adding more risk. The best scalping opportunity came at 9:18 after, RIVN had already tested s2 and rebounded but was in the process of creating a lower high. After testing s2, RIVN tested 150, pulled back to 145 with reducing volume, and then tested a lower high of 148. Now all of this was with muted volume so there was no clue to enter for a scalping opportunity yet. When RIVN made a lower high at 9:18, it started to move downward and volume started to come in again. The volume was not very high like in the flush to s1 but was nonetheless confirmative because of the dried up volume as it created a lower high. The candlestick at 9:12 was to enter at for a quick scalp to s3, near 141ish. At 9:22, move volume came in but it was clear that this was a capitulation volume bar, that could mark the end to the downside in RIVN for the day. The scalp would have been good for 3-4 bucks, whilst risking .80-1.20, a decent r/r opportunity.