Each Tuesday, Mike Webster (Webby) does a video called Swing Trader Status Update. Mike seems to be much more of a swing trader than a position trader and he heads up that service. He is very experienced and has lots of good wisdom some might enjoy.
and then you have to scroll through to find the Tuesday night video on swing trading. They also post a lot of stuff on YouTube, but I have not searched for swing trading there.
It recently broke above a shelf with a high of $70.74. If a swing trader bought that breakout their expectation would be that it would not go back below $70.74. That would be a change of character (expectation breaker), and would trigger a sell.
By the same token, I will argue that if it now goes down and tests that level and it bounces up, that is another buy signal with the same sell price.
I have an alert set.
Thoughts?
Update 11/13/24: Not sure this could have been traded after my post. The price did go back down and found closing support at $70.74, maybe a bold trader would have bought, but I think you wanted to see a good bounce off that support. Instead, it gapped up on earnings. If it consolidates here and does not go below the gap up low, then a breakout over $100 would be buyable. $100 was the high and resistance. Jessie Livermore talked about the psychological importance of big round numbers and Webby mentions that every now and then.
TLN: Talen Energy fell below 50dma yesterday on news the FRC would not let an AI datacenter syphon off “green” energy. But, it closed above the 50dma and today it shot up. A swing trader would have liked the upside reversal and either bought at the close or bought this morning as the price rose and confirmed the move. I wish I was watching this one. Could still be buyable as an early entry for a position trader. It is possible that buyers think Trump will win and relax regulations and all the connection agreement to proceed. Or not. In related news, BWXT had a downside reversal and finished below the 21dma.
But, EPS due in 14 days. Good enough for a Swing Trader.
Update 10/8/24:
Continues its reversal back up to new highs. A good swing trader probably would have added after it broke out of the “base” around 197.61
Update 11/13/24: Has not gone below the 197.61 resistance, but has found support at the big round number of $200. I suppose if I were trading this, I would lock in profits and not hold through tomorrow’s earnings.
$SN has been hot. It fell after earnings and talking heads say Trump tariffs on China could hurt this company. However, the market does not seem to care about that. It had an upside reversal yesterday and is following through on that today. This is a “Change in character”. It is up 4.3% today. If I were swing trading, I would put a stop under the low of today. A 4.3% loss might be too big, and I have no cred or expertise as a swing trader.
update 11/8/24: Up 8.67% today as the reversal up continues. That swing would have worked out in this hot market.
Update 11/13/24: This would have been a successful trade so far, and once again, we see the power of big round numbers as it won’t fall below $100. Magic or psychology? It could not stay above the 50dma, so I suppose if I were holding right now I would talk myself into taking profits because it is not “really” strong in a strong market.
$SQ reported disappointing earnings. Fell out of buy zone and fell all the way to the 50dma, which was below the 200dma. It then had a big upside reversal and is back near the buy zone. I bought near top of today’s range and will sell if it goes below 21dma. Not the ideal stock for a swing, but in a hot market like this and with a reversal like that I thought I would give it a shot.
Update 11/13/24 This trade is doing well and has been breaking out. I was able to use the upside reversal off the 50dma to get in before it entered the buy zone. For a second today it was up 20% above the buy point. Now just 14% above it in 3 trading sessions.
Update: 11/17/24. Here is what Webby said in the video. I did exactly the wrong thing Friday and may buy it back Monday if I can.
SQ: shakeout on earnings with a test of 50dma and upside reversal. So, you got rid of weak holders and the risk event of earnings is behind us. Also, the 8-week hold rule was triggered, indicating this has the potential to be one of those special stocks you treat differently. So now you are looking for a place to get in. We often come down 3 days, and Friday was day 3, then reversed up. That is when you get in. Today’s low is your now stop. Webby feels we are still in a 1999 style market and this is the kind of stock you buy in that market.
APP: looks good here is “the leader in heat”. But Webby sold Friday so he could buy SQ, which is a better setup.
Swing trading an upside reversal in TTD, which I love anyway. An active trader watching the market all day might have bought after it went back above the 21dma. I saw it that night and decided to buy it next day if it continued up. I think my stop loss should be below the 21dma, but that is 7% down, so a bit much.
$MNDY was having an upside reversal off bad earnings and I figured in this market that could make a good swing trade. I did not get in early, in fact, when I did buy it was at the highs for the day, so bad for me. I decided to set my stop loss at yesterday’s lows. We will see how it goes.
I have also updated some of the above posts with my musings. They are working fairly well, so I conclude that when you swing trade in a great market, things work better
$NU fell after earnings, but had a very nice upside reversal taking it back above the 50dma and the 21dma. It is 5% above 50dma, so that would not be a good stop loss unless you bought it as it broke above. The 21dma would be the next candidate for a stop.
I did not see it during the day and did not buy it. Back down 1% after hours. 21dma is 1.1% away, might be too tight for a stop. But, with the afterhours dip, maybe it tests that an bounces, give a new buy opportunity. Or maybe everyone waits for the market to settle a little more.
Hey Pete, I am ok with anyone disagreeing with me and with anyone saying APP is a bad Idea. What I am saying is that I disagree with Webby. Look at this.
Andy,
I appreciate a thoughtful outline of the logic used for a decision, we all learn right or wrong. But since we are in Technical Trader’s Sanctuary, thought I’d throw in the candles:
Nov 14th was a Gravestone Doji, a bearish candle. Not an absolute, but a warning sign that it could slip as folks are undecided but leaning bearish.
Nov 15th was a Bullish engulfing candle, almost a Belt-hold Marubozu. A very bullish candle. Even stronger on the heels of that Gravestone.
In addition, there was churn and uncertainty in the first hour of trading on Friday, but most of the negative was done early. Hesitation during the day with apparent industrial buying spike in the last minutes. All speaking to some accumulation going on. Curious if that happens today.
Today’s a bit more indecisive, but it’s early. I actually added to my position first thing this morning (yes, I bought during amateur hour). It’s not going to gap-up and unlikely to sky, but suspect it will be a solid mover over time. May just consolidate a bit here before moving. If not, I’ve got a stop at forming support of 280.
I had a few minutes this morning to catch IBD Live, actually asked thoughts on APP and only got back a statement along the lines of “…what a move on Friday!!” so not very helpful.
RE: APP. Again, Webby is not dissing it, but he felt SQ was a better setup at the moment. He was right as of today, but that can always change. They bought yesterday and it is up 5% today. It is also an “8-weeks hold” rule, so it might turn into an APP.
Ok I put my stop at 243 the low of the 8th. Hopefully it doesn’t fall back in but if it does I don’t want to be stopped out to early. But I have a nice cushion too. I like adding on these shelves as a stock rises.
It’s all the individuals perspective. Going forward, my Gestalt is that it will continue a sideways consolidation or trend higher. Won’t be surprised and I’m okay if I get shaken-out by a quick hit below what seems to be forming as a true support level. Then I can assess and jump back in if indicated. From my position total, it will close with a profit. Boy, I do NOT miss the days of having to pay for every trade. Makes playing this game so much easier and small mistakes are not as painful.
Looks like they did real well Pete. After looking at it more I think I understand why he liked it. Volume was coming down and it was forming a pocket pivot. Something I have been reading about but still havent grasped the concept that well.
EDIT: Like I said I haven’t the concept down very well. That is not a pocket pivot. The volume would have had to be the greatest in the last 10 days. But I do like that action.
RE: SQ: it is now 22% above breakout in a few days, this definitely locks in the 8-week hold rule.
In addition to SQ and ALAB, I added HOOD and COIN to my swing trade buys. I was getting in late, so not big positions. But the way these acted Friday and now today compared to the market makes them really strong stocks. If we have a melt-up, these are the type that will lead. I wanted SE, but life got in the way.
