There were plenty of intraday opportunities today (1/20/16) for the active short-term trader. Not only was the market very in-play (i.e., increased volatility), as it has been for the past several weeks, there were also a handful of stocks that had news catalysts behind them that offered nice trading opportunities as well. Before reviewing my personal trades for the day, I want to preface this by saying these are short-term, intraday trades (aka Move2Move trades). It’s important that you know your personal time frame and overall strategy. With that out of the way, let’s get into the trade reviews.
- $NFLX: Netflix gaped up over 13 percent yesterday in the after-hours after reporting earnings. However, with the market gaping lower today, the stock opened about $15 off those after-hours highs. I only made two trades in the stock, 1 short and 1 long (in that order). After its opening drive lower, NFLX consolidated for about twenty minutes below $113 where there was a held offer (see chart below). I got short in front of that held offer and scaled out on the way down (see below). After covering my short, I noted on StockTwits and Twitter that NFLX was coming into daily support around $97. At the same time, I was thinking the market had bottomed for the day, so I thought there was a low-risk long opportunity into that $97 support. Once I saw that $97 hold (intraday low was $97.05), I got long around $98 and eventually got flat my long position into that $103 level, which had acted as intraday resistance prior in the day. There was probably another trade to have been made on the long side once the stock got above VWAP and clearly held above that $103 level, but I didn’t take it as I stopped paying attention to the stock unfortunately (the stock ended up rallying up to $110 later in the day).
— Jake Huska (@MarketPicker) Jan. 20 at 10:19 AM
$NFLX coming into potential daily support.
— Jake Huska (@MarketPicker) Jan. 20 at 10:58 AM
— Jake Huska (@MarketPicker) Jan. 20 at 11:34 AM
— Jake Huska (@MarketPicker) Jan. 20 at 11:37 AM
— Jake Huska (@MarketPicker) Jan. 20 at 01:52 PM
2. $IBM: IBM was gapping down after reporting earnings yesterday after the close. The stock opened down about 7.5 percent and was trading around $118. I wrote in my morning note that there was the potential you would see institutional investors step in and buy the stock; it’s a large cap “blue chip” stock that is down well over 40 percent from its all-time highs. I also noted that on a technical basis, we would probably need to see a move above $120 as confirmation that institutions were stepping in to support the stock. As you can see in the chart below, the stock drove higher on the open, got above and held above VWAP as well as that $120 level. I tweeted out that I got long around $120.
— Jake Huska (@MarketPicker) Jan. 20 at 09:45 AM
3. $ZFGN: Zafgen (symbol ZFGN) was gaping up earlier this morning over 80 percent after some positive Phase 3 drug news. I knew from experience that these sub-$10 biotech stocks can have some crazy intraday moves in percentage term, as the large momentum traders trading these type of names tend to think more in terms of points or dollar rather than percentages. I noted $7.50 as support and $9.50/$10/$11 as being upside resistance levels in my morning note. I sold a tad bit early, but I am by no means complaining about the trade 🙂
4. $SPY: The market was gaping down earlier this morning in the pre-market. While fading gap ups have worked several times this month, I was hesitant to be short with such a large gap down. I had $186-$186.50 in SPY as an area to potentially look to short into for an intraday trade, but I never actually got short SPY intraday today. Once SPY took out the pre-market lows, I started to mentally prepare myself to look for a flush to the $182 area, which was around the August lows from last year as well as the October lows from 2014. I thought the ideal case would be a flush below $182 (since there were a lot of eyes on that level) and a quick reversal. Admittedly, I anticipated the move a little bit. You can see my trade management below.
Long $SPY vs LOD. #Intraday
— Jake Huska (@MarketPicker) Jan. 20 at 12:32 PM
— Jake Huska (@MarketPicker) Jan. 20 at 12:54 PM
— Jake Huska (@MarketPicker) Jan. 20 at 01:04 PM
— Jake Huska (@MarketPicker) Jan. 20 at 01:31 PM
— Jake Huska (@MarketPicker) Jan. 20 at 01:47 PM
Intraday VWAP starting to turn up in $SPY
— Jake Huska (@MarketPicker) Jan. 20 at 01:49 PM
— Jake Huska (@MarketPicker) Jan. 20 at 02:52 PM
— Jake Huska (@MarketPicker) Jan. 20 at 03:06 PM
— Jake Huska (@MarketPicker) Jan. 20 at 03:23 PM
5. $VXX: There isn’t too much to say about this, as I shorted VXX around the same I got long SPY (as the two tend to move in the opposite direction of each other). You can see my trade management below.
The purpose of the is post isn’t just to show you how I traded today. Instead, it’s meant to illustrate how 1) being in the right stocks/ETFs, 2) being prepared in the morning with you levels, 3) and executing your plan/adjusting your plan as new data comes in can increase the number of good risk/reward trading opportunities.
Please let me know if you have any questions or comments.