Good evening!
Tonight I want to share my post-trade analysis of my recent SLCA trade, which has been my best trade of the year so far.
Enjoy! โ๏ธ
Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
How it showed on my radar?
High FA score making it into my Watchlist
Big 58% move in 12 days
All kmaโs lining up & upward
Was in top 1M & 3M performers on my daily scans
I missed the name on the first breakout of March 7th, It showed up in my scans the 8th, missing the first entry.
In that case, you want to wait for a second low risk entry.
What was the entry setup?
Once I established the breakout pivot area on the chart (green zone), I waited for a consolidation to form.
First breakout day & following was on HIGH RELATIVE VOLUME
First breakout retraced back and tested the BO pivot area on LOW VOLUME
We try to bounce a first time from the 5dma but got pushed back again to retest the BO pivot area again for a second time. AGAIN ON LOW VOLUME
Once we have that LOWER HIGH, we can link those highs to form our Down Trend Line (DTL)
This DTL is now our entry pivot once we breakout from it.
The following day, my alert goes on and I take the trade @ 15.21$ on March 16th.
Stop loss is placed at Low of Day (LOD)
First partial into strength
Trade worked right from the start and never looked back
On the 3rd day, we were now testing March 8th high which I refer to BASE TOP
These levels can be tricky and are often used to sell
I SOLD INTO STRENGTH 1/2 POSITION @ 17.74$. (+16.7%)
That was a bit lucky to almost uptick that reversal candle
I also mark this false breakout high as being a potential important resistance level
RUNNER 1 (1/4) - 10dma break
As expected, that 17.83$ March 21st was a resistance level and it rejected the attempted breakout of this level.
At this point we were above 10dma and I drew the tight channel to follow the pullback
March 29th we had a gap down open straight below 10dma. But I waited for the close of the day, which we close above the 10dma, and also breaking out of the mini channel straight into 17.83$ resistance level.
Then I made a MISTAKE by selling my first runner (1/4 position) on the intraday break of the 10dma here at @18.35$.
Rule is supposed to have waiting at dayโs close before closing the trade.
That was my first mistake.
RUNNER 2 (1/4) - 21dma break
We then formed a nice little tight area with 4 days of very tight & low volume action.
I drew a pivot at 19.4$ that contained the most recent tight action. A break of this pivot was the breakout I was looking for.
We then played around the precedent breakout candle high (20.8$)
I saw a breakout rejection of the pivot and then 2 very tight days that were still above the 5dma. This looked promising for a breakout at this point.
But then April 21st came with the failed breakout of the pullback channel I was looking daily. This also coincided with the 50dma retest & rejection.
At this point I was very defensive and I decided to close the last runner before market close @ 19.36$ as we undercut both prior dayโs low and 10dma.
Per my RULES, that was my SECOND MISTAKE of this trade. I should have hold until the 21dma was broke.
CURRENT CHART (May 11th)
In retrospect, that last sell was a good move, but still I violated my rules. Now the stock look like it want another leg down after breaking down for a bear flag and also the 50dma.
POST MORTEM
Entry was PERFECT as per my rules
First partial sell into strength was PERFECT
First runner sell was A MISTAKE as I sold before 10dma break at EOD
I need to reinforce that EOD selling rule as per my plan
Second runner sell was A MISTAKE as I anticipated a market selling of. I was right, but I still violated my rules.
I need to validate if a rule taking account the market stage and health would make sense to implement
Overall, still best trade of 2022 with a 20.3% total return.