Well defined wedge pattern on a AMZN. Stock showed relative strenght during the open and broke out of a larger downtrend. The SPY eventually started to break HOD and trend which resulted in a HOD close of AMZN as well.
2. Bigger picture: QQQ/SPY and VIX
Breadth is still decent looking.
SPY and Q’s had a decent day
yesterday. Closed strong near
HOD after a midday trend.
Tomorrow the CPI numbers will
come out. Don’t expect a big
market move ahead of these
Real trend days if we break
Everything is gapping up small.
XLE is performs best besides
ARK. TLT also stronger. SMH is
moving currently red premarket.
VIX level : >20; elevated.
Forgot to mention the importance of Yesterdays bounce of range high and
strong close. That’s significant. Also doesn’t make sense that we’ll trend ‘if SPY
breaks Monday’s high’. Given the open, the trend will start earlier. If we gap up
through this levels during the open, then we need to hold for a trend.
1) What is the catalyst? & Intraday fundamentals
showing relative strength to the market. 470% volume buzz.
Up 0.71ATR in an opening drive.
It was trending down and showing relative weakness to the market. Perhaps this is a reason why
we could show relative strength.
2) Wat are potential setups. What are the playbook indications & statistics I have for these
A bounce continuation play. As I would like to see in TSLA. It is already up 14% from the lows. We
sold off 20%. No extreme selling, but prior to that we had a larger and weaker sell off: 30%.
Also had a 20-25% bounce in May, but also the selling that preceded was huge.
There are plenty of 20% bounces. And those had often consecutive green days. But those weren’t
large green days that did significantly more than 1 ATR.
- Elevated volume. 1.7 RVOL
Volume buzz 280%
-Shallow volume yes
-Visible on 3m, not super obvious.
-Room on daily to trend, broke out of potential bottom range.
- Intraday up to 1 ATR target.
-Just broke the lows on some increased volume. Quickly reclaimed.
5. Catalyst &
Catalyst: Relative strength to the market.
Setup: Bounce continuation setup.
Institutional Ownership: 60,1%
Short %: 0,81%
Average Daily volume (50 day): 67,6 million.
Daily volume: 102 million.
Gap%/Gap ATR: 1,25% / 0,6ATR
RVOL: 1,7 during the open.
6. Key levels Support:
90 level: premarket high and prior high of
daily consolidation. 8/10.
If we don’t hold above this level the setup
93 level: former intraday support. 7/10
96: last obvious lower high of prior
7. Trend day–
Stock selection – Market play
-Elevated VIX : >20.
- SPY gapping up and has potential to trend/close green.
AMZN showing relative strength to the market:
-Beta of 1,17, high correlation with the market.
Bounce continuation cue’s/variables
-Broke significant out of downtrend channel.
- Potential bottom on daily is in.
-Reclaim of important levels: bottom range high 87.
-Extreme selling on the daily, stock bounced on CPI data in November but still trended lower. Not a
Trade2hold factors after 12:15
- Holding above significant support level: 90 confirms price breaks out of downtrend channel and is
bouncing. Prior to that price broke important 87 level.
-Strong market. SPY had potential to continue the breakout of the consolidation range of past weeks.
Open action was indecisive but started to trend just before noon.
-Market starts to trend intraday.
-Technical catalyst: Bounce continuation and break out of downtrend channel.
- Elevated RVOL, not extreme but was elevated.
- Solid trade pattern: Wedge pattern and Trend PB.
- Room to trend on the daily: Yes, just broke out of down trend channel. Up 11% from the bottom at
- Strong open, but extended: 1,75ATR. Immediately trends higher to 2ATR :
-Room to trend intraday: Once price reclaimed HOD, AMZN was only up 1.17ATR.
8. Wedge Pattern Trade2hold – Trade Management
Move2move - Flat
Significant 1m close below 20
1) close on above average selling
2) a new 5m low that occurs after
If price action is weak, THEN
-Significant close below 9EMA.
Move2move – Exit strategy
ATR moves: 0,9 -1 ATR
-Profit taking into
psychological numbers and
-Comes into price
target/indicator and begins
to reject this price.
-Heavy sellers on the tape
into key level.
-Consolidation break to the
-Fails to hold above key level.
-Sharp unstainable moves
Wedge pattern breakout- Entry
Entry: after stock has broken out
of wedge on volume, then enter
when large offers got taken out.
Stop: 1m low candle or below
Break through HOD/resistance.
Wedge visible on multiple
Low volume in consolidation.
Elevated volume when price
breaks out of wedge.
Pattern with higher lows and
lower highs. Tight pattern!
Holds above premarket/
opening range high.
10. What was the optimal trade management strategy, in order to minimize risk
when wrong or maximize gain when right?
How did my strategy deviate from the optimal strategy?
AMZN showed relative strength during the open and had some room on the daily.
We also had some elevated volume, but nothing too special.
Due to analyzing prior bounces in AMZN, I wasn’t convinced of an ATR move
significantly greater than 1ATR.
We had no catalyst, exceptional volume and SPY was trading within a small
opening range; it wasn’t trading.
I chose for a move2move strategy, which was the right choice.
And this move might have turned into a trade2hold/trend move. But that’s okay;
that can happen. That’s an opportunity for me to get back and find new entry. But
I shouldn’t get frustrated. As soon as move/trade is over, it should be done. Don’t
dwell if it goes higher: focus on the next trade!
11. Trade management
Ideal entry vs my entry:
After the wick down that broke the low of the wedge on elevated
volume, price reclaimed quickly and did extremely low volume,
lowest of the day. This was the best entry for the first tier.
I chose to get in on the breakout. In hindsight my entry wasn’t
even that bad.
Lower high of the wedge was .80.
Tape increased and more green prints. But we didn’t have above
average volume on the 1m yet.
Offers at .75 broke and we and strong .80 offers got lifted. This
was the best entry. Would have gotten filled at .86 on the offer.
-I got in the next big offers broke at .90, filled at .91.
I put my stop at .69 risking .21 cents. Low of the breakout candle
was .45 which is way too much for a breakout. I gave it some
room to trend along the 9EMA. But not too much.
I think a 0.9ATR target was a great measured reason2sell. Well
defined move with plenty of edge, given that we had a successful
I moved up my stop because we had plenty of heavy selling after
the breakout. The bids held their own as well, but I didn’t like the
price action. Therefore, I decided to sell because I was up 2R.
13. SPY shows sign of trend at 12:30
high with a
ation on low
all day on AMZN.
14. What could I have done
• I need to be more aware of the trade I am taking in advance. I had
proper risk management and targets that made sense in hindsight.
But if volume had increase and price would have traded to 94-95
without breaking the 1m 20 EMA, this would have been a very
• Focus more on m2m reason2sell than measured move.
It’s good that I trailed my stop along the 9EMA once tape started to
get happy. That way I am protecting my capital. But just selling a
full position after we break heavy offers is hurting it. I need to
focus on the m2m reason2sell. My goal is to capture as much from
the move as possible. I captured 54% of the move which barely
above the minimum.