Tags:
Big Picture
PYPL has been in a longterm down trend that has accelerated recently. They reported earning yesterday which dropped them from 175 to 140.
From my Pre-Market Prep:
"PYPL narrow earnings miss getting punished heavily. Eps $1.11 vs $1.12 estimate, revenue $6.9BN vs $6.86BN estimate. Many lowered price targets, though most are above where it's trading today."
Technical Setup
PYPL put in some huge red candles off the open with very little retracement. It had no recent support in these prices so the divisible by 5 whole number levels made the most sense. I wanted to make a mean reversion trade off these levels. My first attempt from 135 stopped out quickly.
Reading the Tape
As price came into 130 PYPL the downtrend accelerated until it was very extended and I was willing to be more aggressive. I expected a flush of this level and then a rebid before moving higher. I took a starter long at 130 and doubled at $129.36 with a stop at $128.94 for the entire position. This put me in from great prices when $130 rebid and moved higher.
Trade Management
I took off 1/3 of my position $1 higher than my average entry to cover risk. I then took sales into important levels up to VWAP. My last bit got trail stopped out when price dropped $133. Given the overall trend on the day I didn't want to fight for more given that this could trend lower all day.
Conclusions
This is really good trading, finding important levels and trading them with a plan. Couldn't be happier with the result.
Execution detail:
Date/time | Symbol | Qty | Price | Position |
---|---|---|---|---|
2022-02-02 09:38:45 | PYPL | 20 | $135.080 | 20 |
2022-02-02 09:40:21 | PYPL | -20 | $134.480 | 0 |
2022-02-02 09:56:34 | PYPL | 15 | $130.005 | 15 |
2022-02-02 09:57:33 | PYPL | 15 | $129.360 | 30 |
2022-02-02 09:59:56 | PYPL | -10 | $130.717 | 20 |
2022-02-02 10:01:17 | PYPL | -5 | $131.900 | 15 |
2022-02-02 10:06:18 | PYPL | -5 | $132.850 | 10 |
2022-02-02 10:08:22 | PYPL | -5 | $133.760 | 5 |
2022-02-02 10:14:17 | PYPL | -5 | $132.815 | 0 |
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