05/05/2022
Was that the reversal we were looking for?
I’m still skeptical… It’s not often you see the market sell the rumor and buy the news.
If you bought puts at end of day or went long on the inverse ETFs, good on you.
Far too many analysts were guaranteeing that the market would flip to the upside, but they didn’t give much of a timeline.
(Source: getyarn.io)
I think we’ve all had that experience…
But to honor Chris Farley’s performance in the 1995 comedy, Tommy Boy ,let’s check out a car parts company that jumped on earnings yesterday.
The name? It’s a clever one: CarParts.com Inc. (PRTS).
We’re back on the hourly look here.
This is a tricky one and I’m not familiar with this stock. And being that earnings were as strong as they were, particularly on sales, PRTS could blow right through yesterday’s high…
I’ll err on the side of caution though.
It’s best to let trades come to you…
The hourly chart accounts for both premarket and extended hours, so unless you’re a short-term trader, you have to be careful considering the volatility during these periods…
Volume is practically non-existent for the most part unless you catch a runner.
But with the Fibonacci Retracement, I’m looking to the corresponding gaps on the Volume Profile.
From each level above 50%, there’s thin printing over to the right and it thins again after the 23.6% mark.
IF this can hold its place, you can expect more movement to the upside…
Of course, if it breaks down, I’ll watch for support to hold near ~$7.50, ~$7.10, and finally ~$6.60. Given the massive jump, I’d expect the last price level to be the more “logical” buying area.
But let’s not forget, the market cares little about logic…
Now, there’s one area that needs to be touched on as well which I’ve highlighted in neon green.
Look left.
This was the previous resistance area… The question is whether or not that holds.
Lower chart indicators are trending downward as well.
Options Coach Chris Hood’s proprietary Squeeze Trading Tool 1.0 has no signs of a squeeze present with falling bars on the histogram.
The RSI is cooling down, although it’s still positive. And finally, the MACD is only flirting with the signal line while the histogram has gone flat…
It’s risky here and it could pump, but patience for a pullback always pays…
Keep moving,
(Disclosure: I hold no position in PRTS.)
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.
