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PLAY

ELYS – OPENING DRIVE LONG

CATALYST

07:00:00AM
ELYS
ELYS GAME TECHNOLOGY AND CLOAKBOOK DC GRANTED LICENSE TO OPEN SPORTSBOOK IN WASHINGTON, D.C

TRADE IDEA

After releasing bullish news in premarket, heavily beaten down ELYS could touch August resistance @.50 on the open and possibly go higher. Secondary target is 2.15 resistance from January.

SETUP QUALITY

A
• A+ news, sports-betting issues have fallen with the overall market, but a license grant is big step for a company like this
• Heavily beaten down from its $8 dollar highs to .14 in premarket. I did not like it earlier this morning, but by 9:20, price had reclaimed the fugazi resistance level @ .38 from December 14th, 2022. There was no catalyst on the 14th that I could see, but I liked that this area was holding because ELYS had not gotten any volume since August 2021, and premarket volume was close to matching the entire days volume from the 14th. This told me that the move had some convicted longs behind it, at least for the short term.
• after 9am price started to build smoothly into the open with the 1st pullback on a 5-minute chart appearing at 9:20. The consistent building up of price as opposed to panic/fomo buying/selling in premarket, combined with the extreme volume told me that although this had the potential to be volatile, it was unlikely. This told me that it was ok to go long.
• Since the short interest was so low (under 1%) this also told me that price had built up this morning from true long interest only. A high short interest (over 20%) would have been a bonus but could have resulted in less stable price action.

BIG PICTURE

1st trading day after Christmas. SPY historically ends this day in the green, albeit only .5%. Markets have sold-off for weeks, but I am expecting an inside day since at the end of last week we saw the market level off and then close in the green. Light volume is expected today and a huge breakdown or bullish recovery are unlikely. QQQ could remain betweeen 276 and 258 for the rest of the week. There is no major macro-economic news due today in the U.S. Market. Markets remain weak and bearish, reacting in a contrarian manner to bullish and bearish macro news catalysts.

Although ELYS is strong, I do not expect a massive outsized/parabolic move on this because the volume in premarket is already over 10M shares traded. There will a be a lot of market makers looking to capitalize on this and therein control the price as traders who are late to the party attempt to fomo into this (long and short) and get chopped up. This will be thick today and I don’t want to overstay my welcome.

Float 22M
Gapper
Oversold
Fresh News
Clean Daily Chart/Targets
Nasdaq Deficient
.82% short float
Extreme Volume (over 10M in premarket)
High relative strength
VIX over 20

PLAN

• Put on 1/3rd of my position during the consolidation in premarket above .32 just in case price rips on the opening print
• Ideally this will hold .32 on the opening print (VWAP) and then rip
• Add full size as soon as price confirms that it will hold, using volume and speed of the tape for further confirmation
• Look to lock in 1/3rd of profit as we break HOD @.38
• Hold remainder to target unless price action weakens
• Take 90% of profit at target if price breaks through .50 with strength, using discretion to unload the tiny runner
• Full stop is a break and hold below vwap
• Trade should work quickly, hitting target within the 1st 5 mins of the open

REASONS TO SELL

• Tape slows
• HFT is too dominant and is restricting further advance
• Large offer will not lift
• Volume drops off
• Stopped out
• Target hit

EXECUTIONS AND PRICE ACTION

Executed plan perfectly, bidding for price above vwap and adding higher upon confirmation. Took profits as tape slowed near target. Left 10% on just in case this wanted to trend throughout the day. Took stop at vwap, no reason to lose anything on this.

KEY TAKEAWAYS

• Given the liquidity I could have comfortably doubled my size in this trade. I also could have left the 10% share size on longer since the volume and HFT presence was so high. Although the market is weak, this move could mark the potential start of a longer-term reversal in the name, keep it on watch.

• Followed trade plan

• Good use of multiple timeframe technical analysis