UPS Trade on Sep 14, 2022 12:02 from bockr25: Tradervue User Stock Trades.

What I Entered:

1. Trade Pattern: Pattern Alteration Short ultimately, but with a little Trend Continuation Trade Put signals as well
2. I bought 2 Dec 16 '22 $195 Put Contracts @ $13.98 at 11:02am CST
3. William's %R Overbought Trigger was perfect and had a strong candle breakdown through both the 200 & 7-Day SMA's on higher selling volume the day before entry
4. UPS broke a strong support level at $195 with higher than normal selling volume

Why I Entered It:

1. UPS broke through the key $195 support level the day before and had a great confirmation day with higher than normal selling volume the day after. I waited about half of the trading day on the confirmation day to ensure no reversals or drastic price swings back to $195 would occur. When the price was staying below $192 for a few hours straight, I felt fairly confident that the price was not going to reverse back towards $195 strongly and decided to enter
2. All of the broad markets were dropping well into the trading day steadily
3. At the time of the trade, both the NYSE & UPS individual charts were dropping strongly/showing weakness at key support levels/or, in UPS's case, just continuing to break down from the prior support level.
4. Open interest met trade plan requirements, and the bid-ask spread was very reasonable.
5. NYSE, at the time of the trade, had lost the key 14,800 support level

Initial Exit Strategy:

I placed Conditional Stop @ a price greater than or equal to $195.50 as I wanted to give the trade a little room to move if the price tried to cling or bounce back up to the $195 support level a little bit.

Room for Improvement:

1. I was not expecting prices to rebound into the close so strongly on the entry day, both on the broad markets & individual charts. I need to take into account the extreme volatility going on in the current market environment better. Things can really change on a dime more than normal, need to be extra vigilant.
2. I should have probably waited to enter until the following day to let a full confirmation day take place first. But this trade met several key parameters for two separate patterns and fell strongly. So I decided to risk it and enter a few hours before the close on Wednesday. It worked out for me as I believed in overall market weakness, but the same thinking could get me into trouble in the future.

The Results: $2,796/76% Profit

1. Initially switched over to a 10% trailing stop once 20% Profit level was achieved.
2. I was paying attention to markets Thursday evening and noticed FedEx CEO's negative outlook, reduced forecasting, etc., and how it really set FedEx's, UPS's, and the overall stock market sentiment back a lot. It seemed to really have an overall negative effect on everything involved, and I noticed UPS's stock gapped down by almost $12.
3. I decided to wait a few minutes after the market opened Friday to see if UPS's stock continued down, but it seemed to try to make a quick bounce back right after markets opened, and I decided to manually exit the position quickly to lock in an almost 80% profit and not give anything unnecessarily back
4. I think I made the right call getting out when I did, as UPS continued to bounce back throughout the day and post-market Friday. It is already up to almost $178 again when I cashed out around $174-$175
5. With a December expiration & overall negative macro conditions still existing, one could argue that I should have ridden out the mini bounce and been more patient. But with such a great gap down and almost 80% profit, I didn't want to bite the hand that feeds me (so to speak) and ruin the good fortune that I ended up with. I will have to send the FedEx CEO a thank you card in the mail.
6. This has been my most lucrative trade in my short trading career and was a great way to end the week