MRNA Trade on Jan 4, 2022 09:32 from JRockTrades: Tradervue User Stock Trades.

Big Picture

SPY has been continually pushing higher and made a new high in the pre-market on this day. MRNA has been back and forth over large ranges during that same period as covid headwinds determine it's direction on any given day.

Since the severity of the omicron variant has been understood to be less serious, MRNA has been in a downtrend with sellers in control.

Technical Setup

RVOL: 144%
ATR: 20.65
VIX: 16.75

MRNA was one of the weakest stocks in the market yesterday, which put it on my radar. I was looking for follow through today. I was looking to find a level to short against. My first try was against yesterdays afternoon high at $236 with $1 of risk. That trade got stopped out.

Second trade was against the opening drive high at just over 239, which is the one which worked.

Reading the Tape

MRNA made an opening drive high just over 239 before puling back a little. It made another run at 239 and did make a new high, but just by pennies and there was no flurry of green prints and a definite move higher, so I quickly entered short with $1 of risk.

Trade Management

As the trade started to work, I took off 1/3 of the position about $1 lower to cover risk. I had my eye on the premarket low as the ultimate target and I wanted to take profits on the way towards there. It's not often that the trade works this well, but every now and then they do.

I contemplated flipping long above 230, but luckily I didn't as that trade would have gotten stopped out.

Conclusions

There was some further downside beyond the premarket low and it might have been a good idea to hold some of my position for that eventuality. Still, for a trade that started with a thesis and had a plan, it worked exceptionally well. Things don't often come together this cleanly.