DELL Trade on Mar 5, 2024 09:47 from lateralus014: Tradervue User Stock Trades.

Thesis:

Dell is on Day 3 post earnings, and failed to make a new high on Day #2. Day 2 candle also close bearish, with a high wick, indicating repeat sellers above 122s. Expecting a retracement to lower levels 117,115 area from Day 1.

Setup:

Setup #1 was a direct shot down off the open, planning to get in on the bounce up to a VWAP rejection/EMA rejection.

Setup #2 was a pop off the open, and then a reversal back to open price.

What actually happened was a bit of a choppy open, sell candle, then some buying back into VWAP, but failing 3 times to close above the open price. Could indicate selling from previous days, as well as any new buyers to bail on plans of going higher this day. Market was also very weak off the open.

Setup, to name it, would be a sell off into premarket lows, and sell the bounce from VWAP. A being the open, B being premarket lows, C being a VWAP/EMA area, and D being the shot down.

ATR: 5.63

RVOL: 150% on the day

AVD: 5.29m

SF: 4.16%

The Good:

The good here, my thesis. I had an idea that it could not break earnings high on day 2, indicating an exhaustion of buyers/no true buyers for a follow through. I believe it could sell off, and with the market weakness, that would help me to be more confident in the short sale.

We also made money here, good trade, good trade management overall, the 1 middle exit was OK, took some pressure off of me, and I was ok with that. Huge offer filled on the tape + volume here, and I think de-risking slightly is alright. Second exit was after another large volume spike, at our target of 115, nice one. Last all out exit was break of the 2minute 20EMA. Unfortunately I think the fill was kind of bad here, and we kind of left it on autopilot as we went to the gym at 9:00, and had an appointment at 10:00. Going forward, might just have to push gym to 2:15, and go for a short walk midday. Not the first time we've lost profits because we leave the screen on auto. Overall = good.

The Bad:

Trade #1 was a chase entry, I think entering on the break of lows on the 4th candle (2M) is a bit of a stretch, while stock sold off sharply much lower, this is not a good practice. Stopped.

Trade #2 was also a bit of a stretch from how I WANT to trade. Breaking lows, removing STOP, adding in no mans land (no low break, into low volume push higher) and final add was good, breaking the lows of a wick low, underneath VWAP.

Not necessarily bad but we did miss the initial VWAP rejection candle enter area, and I think that contributed to my haste. Another spot to get short was on the low volume melt up before it eventually failed. Issue was we were already in heavy-ish, so adding here felt not good.

The Ugly:

Removing STOP loss on Trade #2 is the ugly. When we remove stop, we right away feel awful. It sucks taking multiple losses, we were slightly red on the day after a scratch on GTLB, and then a failed entry on DELL. Losing trades suck, unprofitable setups are OK. We were banking on the stock selling off, breaking lows, and continuation. We go this, eventually, and could've had even BETTER price. The issue with removing the STOP is that we tie ourselves to a sub-par entry.

STOP OUT = better entry point IF the idea is still valid.

Where I can improve in the future in a another similar setup:

Not chasing. The initial idea is good, stock gaps up, stock fails to make new highs, stock sells off to a previous support area to find new buyers. This is a good, repeatable, actionable idea. Execution was flawed. Stocks move in waves, especially in the premarket range. Wait for the specific setup - Premarket low bounce into VWAP - and go from there. There were 2 places to really get heavy and feel good about the trade on the chart, while our executions are kinda meh, looking at it now (it was at the time too, no lie) Sub-par entry, good/great management.

Best exits = Best would be to leave everything on the table, and let the price play out lower. Exit 1 was in the 117s, while there was no new 5minute high put in until the 115.80s.

Holding until the close of a candle above the 5minute 20EMA would bring our exit into 115.20 territory, vs the 115.76 area on the 2minute 20EMA.

Overall good holding, our manual exit #2 was after a massive volume spike on the 2 minute into 115. I think 115 is probably an area strong on options as well, so there should be expected volatility there. The absolute bottom was 113.89, so we missed the bottom tick by about $2.00 on the EMA exit. Still not bad.

Repeatable (Y/N):

Absolutely. Premarket low bounce into VWAP rejection, great trade, happens all the time. We could also have added once more, after the initial candle broke the premarket low, we had a very low volume up candle. Like we've seen on many other stocks selling off, the break of this candle's lows is a great add/entry spot. Lack of volume + weak push higher after breaking new lows. That's the ticket.