HOOD Trade on Jan 31, 2022 09:39 from JRockTrades: Tradervue User Stock Trades.

Big Picture

The market has been very much in play for several weeks now, showing extreme volatility. Friday was the first day in which we closed at the high. Today saw a further reduction in volatility with the VIX dropping into the low twenties.

HOOD has been in a longterm selloff since making an ATH in the 80s during an epic squeeze in the meme stock days. It reported Friday very disappointing numbers and went all the way to $10. This level did find bottom fishers as the IPO price was I think $34. HOOD did bounce hard on Friday moving as high as $12.80 before closing very strongly just below that level. This setup is the classic 2nd Day Play.

Technical Setup

HOOD dipped to just below $12 off the open before reclaiming. Given the strength the prior day, this seemed like a good level to get involved, so I did risking a new low, around 20 cents. My goal was to capture a move of similar magnitude as was made on Friday, about $2.50 to $3.

Trade Management

Price pretty much ripped right after I hit the entry and never challenged my stop. I was quick to take 30% off at a level that would completely cover the remaining risk on the trade. I took profits in smaller and smaller increments as high as $14.40. At this point the move approximately equaled the move on the previous day and I was almost flat. I put a trailing stop on the last bit at $13.74 and that held for a very long time before eventually breaking.

Conclusions

I did a good job identifying a key level off the open and got in at very good prices with minimal risk. The setup was as good as they get. Volatility has been coming way down lending room for stocks to trend, which helped me out greatly on this day. I ended up getting excellent risk to reward and pretty much made my profit target with a portion of my shares. I traded this very well and would take the setup if it presented again in a similar market.