PDD Trade on Mar 20, 2023 11:06 from JRockTrades: Tradervue User Stock Trades.

From my pre-market prep:
PDD earnings: Rev $5.79BN vs $5.96BN expected, adjusted earnings per ADS of RMB8.34 was below the FactSet consensus of RMB8.57. Earnings reaction may be an overreaction.

Setup:
My initial take was that the downside move on PDD was probably an overreaction. While my idea was that the numbers weren't that bad (especially YoY), the the reaction was very swift. The opening drive took it as low as 75 with the pre-market high being 82.35. I took some initial long trades from these lower levels, but had only been watching for about the hour leading up to this trade. My feeling was that the only short worth taking was against the pre-market high. It was going to take a lot of energy to reclaim this level and would be a good place to look for a pullback.

The Trade:
My initial entries had about an 82.25 average with about 40 cents of risk. This trade got stopped out. Price kind of stayed in that 82.50 area and didn't break higher on volume, so I decided to reenter short at 82.48 average again for a second try. I had the same about 40 cents of risk. I had a target of 80. This trade did work.

I started to cover my risk about 50 cents lower than my entry. I covered in very small amounts into 81, before price retraced to just over 82. My stop was 82.26, which never got taken out on this retracement. Ultimately I was looking for a move to 80. Price moved in my direction again and I was taking covers into 80.50 down to 80 area. I continued to cover into VWAP and almost 79 when I finally ran out of shares.

Conclusions:
Ultimately, this trade was a combination of luck and conviction. I had eyed the 82.3 level as one I was very interested in and honestly did not think price would get there. I didn't let my initial stop out deter that conviction and I got a nice trade out of it. I wish it was with bigger size, but I have to live within my current risk parameters, which are very tight.