Definitely an A+ opportunity. TSM was a HTF BO with an earnings catalyst and high elevated volume. It also provided a very strong pattern.

1. HTF BO – Earnings
beat
Catalyst: Earnings beat
Setup: HTF BO – D1 earnings gap up
Trades: Trend PB
Ticker: TSM
Date: 12-1-23

2. Bigger picture: SMH and VIX
SMH
‘V’ shaped bounce after the
sell off since December CPI
day. Unlike SPY and Q’s
there wasn’t really a range
formed. Broke through
50SMA on volume and
didn’t bounce.
VIX level : 18
Lower volatility, below the
20 threshold. But not
extremely low.

3. Gameplan/Checklist
Higher checklist
-There’s the important HTF level we’re
holding above and the PB occurs after a
break of opening range high.
- Market is strong on the daily and started
to consolidate above VWAP after a weak
open. Later starts to trend.
-Earnings beat is a strong catalyst.
-Earnings setup is strong: up 1.5ATR which
is significant. HTF BO setup had already a
10% run preceding the breakout.
Breakouts from a base are usually
stronger. Strong stock showing relative
strength compared to TSM.
- HTF BO means there’s usually room to
trend. For such a strong setup with
elevated volume & catalyst, being up
1.27ATR isn’t that much room to trend
intraday.
Potential to go higher/lower
Holding above/below key level? Yes
Strong/weak market (bigger
picture)? Yes
Strong/ weak market intraday? Medium
Strong/weak fundamental catalyst? Yes
Strong/weak setup? Yes
Elevated RVOL? Yes
Room to trend on daily? Yes
Room to trend intraday? Yes
Trade2hold thesis
I think a 1.5ATR measured move
is very likely.
It’s too early to tell for a strong
close. Catalyst plus HTF BO setup
on elevated volume tells me this
is a trade2hold.

4. HTF BO &
Morning
continuation
– Trade
Strategy
Stock selection
-Stock in play with a significant (technical) catalyst, earnings report or strong theme.
-Elevated RVOL above 3.
-Strong move from the open (0.75ATR move) OR exceptionally strong volume during open.
Breakout variables
-Stock is in an uptrend.
-Significant price level on the daily chart that makes more participants focused on this level.
-Breakout is occurring from a base. When this breakout occurs on volume it is more likely to follow through
initially.
-We are trading in a strong market. SMH had reclaimed the 50SMA which is a bullish signal. It did so on
increased volume.
-Market breadth is relatively strong. It’s not extremely strong where we have a lot of strength as in
November, but it’s okay.
-Time spend above the breakout levels: 2-3 min intraday at the open & 10m intraday after the open. For
swing trades look for a daily close above this level.
-Surge in trading activity when price trades through level.
-Price history has shown that breakouts from a base have been successful. Also, when the stock gapped up a
lot. Over time stocks will have many of the same participants. Traders like most humans are repetitive in
their behavior.
D3 continuation
Price reclaims important levels of D1/D2 and start to continue the move on the daily.

5. Technical Analysis: Prior HTF BO’s
Not exactly the same as
the current HTF BO.
But it has shown that it
can make big moves,
even when the breakout
is already a bit extended.
Plenty of those days
didn’t’ close strong. That
was similar to today’s
breakout.

6. Catalyst &
Fundamentals
Catalyst: Earnings beat & technical setup.
Setup: HTF BO & D1 earnings gap up.
Float:
Institutional Ownership: 17,50%
Short %: 0,65%
ATR: 2,03.
Average Daily volume (50 day): 14,8 million.
Daily volume: 36 million.
Gap%/Gap ATR: 3,89% / 1,6ATR
RVOL: >3

7. Key levels
HTF level: 83-83,50 is the infliction
area for this setup.

8. Technical
Analysis:
(HTF) Trend PB
10m holds above 9EMA,
5m holds above 20 EMA.
Shallow volume during PB
Pullback visible on multiple time
frames: 1m, 5m, 10m.
Bounce of key level: 86,50
Opening range high
Elevated volume when PB
starts to work.

9. Technical Analysis
First entry:
Plenty of opportunity to get the best entry.
Add:
Another perfect Trend PB before PT is hit gave a
great opportunity to double up in size and adjust
stop.
1.5ATR profit target hit.
There is a small reason2sell here: elevated selling
volume. BUT; the 2m 9EMA holds very well and
price barely touched the 25% exit range. If I
manage to stay calm here, the next CHOCH is only
after we move another 0,45ATR.
IF my normal core is 67-75%, then I think I should
sell 75-90% here since price has already move a lot
past original PT.
Flat: Sell remaining for significant lower low along
5m 20 EMA.

10. What could I have done
better?
• Since this is a trade2hold, I don’t want to micromanage this
position. But I should make an exception when I want to postpone
selling my core. Since this is a 5m PB I should look at the 2m chart
for significant reason2sell and use my exit ranges after these have
occurred. This way I can postpone selling the core of my position
for a better performance score.
• When another PB occurs before price hits my profit target, I should
treat this as a separate trade. This is a great opportunity to use
pyramiding and to really size up trades that are working. These are
things I must do ASAP as this can lead to really skewed returns.