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JasonH

What did Andrew see in MU at open this morning?

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Below is what MU looked like when @Andrew Aziz decided to short it. What are the indicators here? For ORB, it hasn't broken out yet. And the Level 2 looks pretty benign. But sure enough, turned into a good trade.

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image.png.ba13275a0a67a39efa5c9ca0574a84f0.png

 

 

 

Edited by JasonHeidecker
Replaced 'after' screenshot to capture exits in 3rd minute candle.

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Here are my opinions on what Andrew saw. Aug 5th opening of MU

- Pre-market conditions of MU were a continuous fade. Showing weekness. Perhaps short biast on it to begin with
- SPY on the low (influence)
- on open (9:30) there was attempt to break the high of the previous (pre-market) green candle. It failed to break that.
- In addition, it failed to break/hold V-WAP as well as 9 and 20 EMA
- Once the first minute candle closed, the price popped up just touching the V-WAP however fell easily/quickly indicating a short potential (this happens quickly remember)
- with anticipation of the price continuing to fall, Andrew place his short orders anticipating the break of the previous candle body and wick
- Andrew scalped his profits at multiple stages as it continued to go lower, 20-30 cent scalp range.  Very nice.

I'm not sure based on your screen grabs if Andrew closed his entire position on the second minute candle or if he held into the 3rd minute candle which would have rendered him another potential 30 cents on remaining balance of shares.

 

Hope you and others agree with what I have to say above.  If not, please share your ideas.

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2 hours ago, SpoTT Trader said:

Here are my opinions on what Andrew saw. Aug 5th opening of MU

- Pre-market conditions of MU were a continuous fade. Showing weekness. Perhaps short biast on it to begin with
- SPY on the low (influence)
- on open (9:30) there was attempt to break the high of the previous (pre-market) green candle. It failed to break that.
- In addition, it failed to break/hold V-WAP as well as 9 and 20 EMA
- Once the first minute candle closed, the price popped up just touching the V-WAP however fell easily/quickly indicating a short potential (this happens quickly remember)
- with anticipation of the price continuing to fall, Andrew place his short orders anticipating the break of the previous candle body and wick
- Andrew scalped his profits at multiple stages as it continued to go lower, 20-30 cent scalp range.  Very nice.

I'm not sure based on your screen grabs if Andrew closed his entire position on the second minute candle or if he held into the 3rd minute candle which would have rendered him another potential 30 cents on remaining balance of shares.

 

Hope you and others agree with what I have to say above.  If not, please share your ideas.

SpoTT on....lol

Looks like a perfect entry on a weak stock that had some short covering on the 2nd 1min candle...whether I take this trade depends mostly on whether I see the bounce (short cover rally) completed or at least 75%+ complete...I can live with a bit more bounce but unfortunately many times in the first 5min these bounces can also get pretty ugly...now as SpoTT nicely lays out the odds of that happening are not very high...one way of hedging against continued bounces is to take 25-50% of your full position..if the stock continues to push up you can add more to the position..now this can backfire too and it all depends on your risk tolerance and assessment of the price action...which can become difficult to view objectively once you enter the trade.

 

Maybe Andrew cares to explain this trade as he saw it....

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21 hours ago, SpoTT Trader said:

- Once the first minute candle closed, the price popped up just touching the V-WAP however fell easily/quickly indicating a short potential (this happens quickly remember)

Thank you for the thoughtful responses @SpoTT Trader and @NinjaTrader. I think this quote from SpoTT is an important one. You can't see how quickly MU probably began to drop at this point (first screenshot). So along with the other things mentioned by SpoTT, it looked like a possible short opportunity.

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Look to the LEFT at the candle patterns......a low was broken....... at the low is a indecision candle which will offer resistance......notice on any chart past DOJIs offer resistance/support......will they hold ?....not known but its calculated risk....notice the breaking of past lows (esp on 15M) and if tht low is a DOJI style candle. Plus it breaks a DAILY level.  Its a good starting point in addition to the comments above. A lot of confluence to be bearish.  Processing all that info quickly on the fly is another skill or planning before the market opens is also a developed skill.

 

Good question/observations.....we should analyze more of his trades like this......take a few images as he trade and post here.  Very good question Jason.

Edited by Alastair Mowatt
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6 hours ago, JasonHeidecker said:

Thank you for the thoughtful responses @SpoTT Trader and @NinjaTrader. I think this quote from SpoTT is an important one. You can't see how quickly MU probably began to drop at this point (first screenshot). So along with the other things mentioned by SpoTT, it looked like a possible short opportunity.

In aggregate all those factors (thanks spoTT for a great explanation of each)  make this a "high conviction" trade. I wouldn't necessarily get hung up on one thing. Decision making in trading requires the ability to factor in a lot of different variables in synchrony. Good traders like Andrew can "read" all this while watching the price action and make really fast decisions and nail great entries and exits like none of us could. In addition, MU and AMD are his goto stocks that he ccould probably milk his daily goal even when they are treading sideways...which brings up an important point. It pays to keep a watchlist of stocks/ETFs that are always gapping a bit on decent volume like FB, AAPL, NVDA (Norm), MU & AMD (Andrew) ROKU, NUGT (Brian). I keep separate lists for staple stocks and then also IPOs like LYFT, UBER, ZM, PINS that seem to rear their head every now and then. I trade MU and AMD now and then but the low price also requires large position sizes for scalpers so on a day where many "staple" stocks are gapping with SPY I prefer trading AAPL, FB or ROKU.

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12 hours ago, NinjaTrader said:

In aggregate all those factors (thanks spoTT for a great explanation of each)  make this a "high conviction" trade. I wouldn't necessarily get hung up on one thing. Decision making in trading requires the ability to factor in a lot of different variables in synchrony.

I want to support this statement.  It is very important to know that trading is about a lot of different factors combined hopefully preparing you to make the best possible decision when choosing to enter/exit.  (That is why Andrew's books are a great read by the way!)

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