— Jake Huska (@MarketPicker) Jul. 24 at 04:06 PM
I made the above comment after the close this past Friday (7/24/15) after trading a handful of In Play names. If you’re a short-term trader (i.e., an intraday trader), having excellent technical analysis skills isn’t enough in my opinion. By focusing on stocks with a fundamental News Catalyst behind them, your win rate will improve and your overall risk/reward will be more skewed in your favor. While I know there are plenty of pure technical traders, I would argue that these traders’ time frames tend to be longer than intraday. Of course this isn’t to say you can’t make money by being a pure intraday technical trader. Rather, it is my opinion that your odds of success as a short-term trader will greatly improve when you combine your technical analysis skills (& tape reading) with stocks that are In Play. I’m going to go through all of the names that I traded this past Friday and discuss why I was watching them as well as when, where, and why I was trading them.
First up, Biogen ($BIIB): Biogen was gaping down 15% Friday morning after reporting weak sales, lowered guidance, and a failure in a clinical trial. Biogen also cut its full-year revenue guidance to 6%-8% growth from 14%-16% and cut its EPS range to $15.50-$15.95, which was below consensus of $16.64. My thought process was that since Biogen was a large cap stock, many of the institutions that owned the stock with the assumption of higher growth numbers would likely unload shares in a cascading fashion. With this intraday fundamental News Catalyst and market psychology aspect in my mind, I then turned to the price action of the stock. As you can see below, $300 and $275 were potential weekly support levels. With the stock opening at $327, I was confident there was still a decent amount of potential downside intraday. Zooming in on the shorter time frame, you can see below on the 5min chart the stock formed a well-defined opening range. You can see my trade management in the chart below along with annotations.
Second, $IBB: Taking from the $BIIB theme, I decided to effectively play the biotech sector as well via the iShares Nasdaq Biotechnology Index Fund ETF, aka $IBB. The intraday price action was similar to that of $BIIB; there was a decent opening range to work with, albeit it wasn’t as clean or defined as the opening range in $BIIB. Nonetheless, I put on a short trade once it broke below its opening range to the downside with stops above VWAP and the top of that range. I scaled out on the way down and got flat on a volume spike down to daily support at $377. The risk/reward was alright, not the greatest, but I thought it was important to keep an eye on the biotech sector as a whole that day with the Biogen news.
Next up, Amazon ($AMZN): Amazon reported solid numbers after-hours Thursday, beating revenue estimates, which were up 20% YoY and also delivering a quarterly profit when the expectations were for a quarterly loss. The stock gaped up over 100 points (over 20%) in the post-market to new all-time highs, trading as high as $590 in the pre-market Friday. There were several traders on StockTwits voicing their opinion that they thought the up move in $AMZN was overdone; I too thought that many traders would likely use this huge gap up as an opportunity to take profits, potentially causing the stock to pull in a bit intraday. Note that while the intraday fundamentals were clearly to the upside (i.e., bullish), the nuance of the market psychology – profit taking after a huge gap up – altered my view a bit (newer traders should focus their attention on the side of the underlying trend). However, I was still going to wait for price confirmation before shorting such a strong stock with positive intraday fundamentals. As you can see below, I noted on StockTwits that $560 was the inflection point I was using to determine if there would likely be a larger pullback. The stock attempted to hold that $560 level at first but ultimately broke below and held below that key level before dropping another 30 points. You can see my trade management in the chart below.
While #s were solid seems likely to me tomorrow’s trading range will be contained to post-market s/r. We’ll see where we are tomorrow. $AMZN
— Jake Huska (@MarketPicker) Jul. 23 at 05:27 PM
— Jake Huska (@MarketPicker) Jul. 24 at 09:49 AM
— Jake Huska (@MarketPicker) Jul. 24 at 10:06 AM
Sellers in control now… $AMZN #Intraday
— Jake Huska (@MarketPicker) Jul. 24 at 10:21 AM
— Jake Huska (@MarketPicker) Jul. 24 at 01:00 PM
Here’s a visual of that (re: $AMZN):
— Jake Huska (@MarketPicker) Jul. 24 at 01:27 PM
— Jake Huska (@MarketPicker) Jul. 24 at 04:02 PM
Third, Pandora ($P): Pandora beat on revenue and earnings, reported increased subscription and advertising revenue, and raised its full-year forecast (i.e., positive intraday fundamentals). Looking at its chart, the stock was attempting to break its daily downtrend. I noted $15.30/$15.50 as being support and $15.80/$16/$16.50 as being resistance in my notes before the open (which I tweeted out). I put in a bid before the market opened and was fortunate enough to get hit with a LOD print @ $15.16. I scaled out on the way up into resistance and got flat into $16.50. Easy enough right 😉
Fourth, TripAdvisor ($TRIP): $TRIP reported their second quarter numbers and missed analysts’ estimates for both earnings and revenue, causing the stock to drop over 10% on Friday. I’m generally hesitant to trade this stock even when it is In Play since it can overshoot to the upside or downside (whippy and wicky). I was also watching other names at the time, so I wasn’t extremely focused on the stock on an immediate basis. Still, I noted that $85.50-$86 as being resistance on the daily and thought that a short entry at this area would be a relatively low risk trade for continuation to the downside. I put out an offer (and an accompanying stop) towards the upper end of that resistance zone at $85.82. While my offer got hit, I was pretty quickly stopped out above $86.30, which just so happened to be 6 cents below the HOD! The stock proceeded to trade 6 points lower from my initial entry (talk about an opportunity cost!). Nonetheless, I still thought my initial entry was a relatively conservative one from a risk/reward perspective. Clearly, though, my failure to look for spots to get back in resulted in missing out on further downside. As a short-term trader, you’re naturally going to be stopped out pretty often, so it is important to continue looking for low risk entries to get back in where you can still control your risk and that make sense to you. You can see my trade management below.
Fifth, Sandisk ($SNDK): There’s not a whole lot to talk about here, as I made a simple short scalp trade. The stock was a Second Day Play, as it had a huge gap up the prior day after beating on both earnings and revenue estimates. I had set an alert after the open right around VWAP at $62 that went off midday. The stock retraced into its declining VWAP, and it had some trouble holding above $62.10. I put on a relatively small short position below $62 with a stop above $62.12 and covered an average of 50 cents lower. I purposefully don’t want to focus as much on this scalp trade in this post but decided to at least mention it here; instead, I would like to continue discussing the theme of trading with a fundamental intraday News Catalyst as discussed in the above examples.
Finally, SPDR S&P 500 ($SPY): $SPY continued to trade in its roughly 9 point daily range after failing to break out to new highs as many traders had undoubtedly thought it would do. Coming into Friday, $SPY had already closed down 3 days in a row, so I was naturally hesitant to be initiating new shorts on the fourth day (since Friday was my first day back trading in almost a month, I had obviously missed shorting in the days earlier). Nonetheless, I got short on a horizontal consolidation intraday at $209.44 with a stop at $209.71. As you can see below, I scaled out of my short on the way down and got flat into $208 support. I eventually flipped long above and below $208 and got marked with an average of $207.76. I trimmed some in the after-hours, as it was walked up about a point from the intraday lows. Although $208 is technically in the middle of $SPY’s daily range, I felt the risk/reward was skewed to the long side after being down now 4 days in a row and pulling into a defined support zone at $208 (there were some other traders who made note of the area being an area of interest based on Fibonacci retracment levels as well as other indicators; while I don’t necessarily use all of these other indicators myself, it let me know that other traders were watching this level as well). UPDATE: I was stopped out of rest of my $SPY long early Monday morning during pre-market trading (7/27/25). The risk/reward still likely favors the long side, but unfortunately I won’t be able to actively watch the market early this week, so I’m taking my stop and moving on.
Thanks for reading. Please let me know if you have any questions or comments.