KAVL Trade on Feb 11, 2022 09:32 from BanalityOfEvil: Tradervue User Stock Trades.

KAVL – Opening Drive 2nd Day Play

Trade Idea
• KAVL could test $3 on the open today, driven by yesterday’s news
• Quality – B (lowered from “A” given price and overall market volatility), but the technical levels and catalyst are solid.

Big Picture
• News Broke late yesterday morning and KAVL saw some volume on the daily but sold lower, dragged down by weakness in the market related to negative CPI data release.
• Bullish news from yesterday morning -KAIVAL BRANDS WINS JUDICIAL STAY OF FDA'S MARKETING DENIAL ORDER
• SPY sold through 450 yesterday, but is has reclaimed and is flirting with 450 in premarket near the open
• Small caps have seen some follow through this week
• My statistics on stocks under $3 are not great, but the setup is looking like it has the most potential for momentum this morning vs my watchlist and stocks in my price range
• KAVL is the strongest gapper this morning
• RVOL 65X
• Low Float 11M
• VIX = 23
• Key Technical Levels 1.90(long term), 2.10 – 2.28 (key levels this week and in premarket today)
• Chart is beaten down with LTR @ $3 followed by $4.70

Plan
• Trade using 500 lots
• On the open, observe price action and wait for stock to pull back to $2.10, may drop close to $2 before buyers step in
• Get long on 1st sign of strength at a technical level confirmed by tape, 500 shares, adding up to 1000 shares for the break of opening price, selling 80% into strength as price moves higher.
• Hold a core and look to add on the 1st pullback up to 2000 shares, selling ½ above the break of HOD, and then selling in 1/3rds depending on price action, holding at least 20% for a move to $3 until R2S
- If moves through $3 with extreme strength then consider holding above $3 to 3.50 or even 4 until R2s

Executions
• Completely missed my entry, was looking at my scanners
• @ 9:32 long 1000 shares - price had touched established premarket level on the opening print and ripped to 2.50. Since $2.50 is a psychological level, I decided to wait for the break of 2.50 to enter, thinking this may rip up to 3 or go LU
• @9:34 price has pulled back to vwap, almost stopping me out
• @9:38 algo presence is heavy and tape is slow, price has retraced 50% of the pullback to I sold ½ to lower my risk, thinking the price may be a bit extended, and not wanting to take a large loss.
• @9:42 tape and price confirm strength is present so I add back in, which helped to lower my price average and position me for the next leg up, but R:R was not what I planned for, so I did not move up to full size. Attempting to manage risk.
• @9:46 stock had broken HOD pivot but pulled back after 2 topping wicks on the 1 min, volume declining and tape slowing, sold ½.
• @9:51 strength continued and I sold 80%, looking to book some profit on my sloppy executions
• @10:07 stock had tested 3 but algo presence was heavy, tape was slowing, lower highs, lower lows forming told me we were now on the back side of the move. VWAP tested and broken to the downside. Sold my tiny runner above price average. Held as long I could.
• This was an awesome OPENING DRIVE opportunity and you botched it!

Key Takeaways
• Be more patient with your entries. If not comfortable buying the opening print then you MUST WAIT for the 1st pullback. Get better prices. If the symbol moves strong off the open and you are not ok with the opening print, then you will have to be ok with potentially missing the move.
• Your entry was sloppy. This was a layup entry and you missed it. The opening print touched a key short term resistance level (TIME TO POUNCE!) and then it ripped higher, and you chased out of FOMO. This forced you to take off risk on the 1st pullback as opposed to the correct technique of adding on the 1st pullback. There was additional support at $2 and liquidity in the name, so you could have gotten out if you had to, if you had bought correctly on the 1st print. PUT ON RISK WHEN ITS TIME TO PUT ON RISK OR ELSE YOU WILL BE RISKING SUCCESS IN THE LONG RUN.
• Read the tape well. Did a good job managing the poor entry, taking off risk, and then adding risk back on immediately once you saw confirmation on the tape and volume start to pick back up. This allowed you to be in the trade, but the poor entry ruined your chance of optimizing profit on the meat of the move.