05/02/2022
“It looks good for continuation!”
When I hear this, I wait…
It’s far too often that a stock will go parabolic one day and folks will FOMO in like their life depends on getting into the trade.
And what happens to their investment?
(Source: gfycat.com)
That’s right, half…
In today’s Before the Bell, we’ll look at one that a large number of traders decided to hold over the weekend. Risky move.
But depending on the price action, they may be alright if they don’t get shaken out…
Let’s check out Vaxxinity, Inc. (VAXX):
On the left is the daily look with the 15-minute over on the right.
Now, I started charting this last night, so premarket has filled in some of the candles I’ve drawn in, and so far, it’s pretty close…
What I’m looking for is the type of price action that’s become all too common with these types of runs.
The Fibonacci Retracement is drawn from the beginning of the move two days prior to going parabolic.
I’m using the shorter time frame for this, but using the daily would only show a slight variance as I’m taking into account the Volume Profile.
You see, when these moves are made, I’ll typically skip the Fib Pocket (50-61.8%) and wait for the 78.6% level instead… Like all things in the market, it’s no perfect science.
But momentum has already increased to the downside here and ~$6.89 is my line in the sand as the level of resistance (dotted red line). For now, I’m a bystander…
On the 15-minute chart, you’ll notice the green and red bands wrapped around the price action. These are customized ATR Baselines and this is an indicator that comes to us courtesy of Rogue Investing’s Options Coach, Chris Hood.
Green, good. Red, bad.
I’ll watch for the price action to play out similar to what I’ve drawn in with the ATR Baseline going red for a premarket “Fade”, at least to the mid $5.00’s.
The volume is well above average, but considering the current level of chop, this could be a nice play on the short side. I just wouldn’t get greedy if buyers come in.
Now, the open is another story…
I’ll watch for the 200ema (green) around ~$4.50+ to hold support and if the price action shifts bullish and breaks above the opening range after the first 15-30 minutes, I’ll go long…
There’s just no reason to hold these types of plays overnight on the first day.
Keep moving,
(Disclosure: I hold no position in ATOS.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
