TSLA Trend Trade after Double Bottom Intraday


Published on

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

TSLA Trend Trade after Double Bottom Intraday

  1. 1. TSLA Intraday Trend Trade after Reversal off Double Bottom Deborah Knighton 1/14/2014
  2. 2. SMB TRAINING is NOT a Broker Dealer. SMB Training engages in trader education and training. SMB TRAINING offers a number of products and services, both electronical (over the internet through smbtraining.com) and in person. SMB TRAINING also offers web-based, interactive training courses on demand. The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decision you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs. This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs. SMB Training and SMB Capital Management, LLC are separate but affiliated companies. No relevant positions Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.”
  3. 3. Big Picture • After making an all time high on December 31st, the SPY consolidated for seven days then reversed lower yesterday moving it out of its consolidation box. • Today the overseas markets were mixed in Asia and were trading slightly lower in Europe prior to the open. • The futures were up this morning on better than expected retail sales and the SPY gapped up and continued to trend higher the rest of the day.
  4. 4. The Big Picture SPY reversed below the bottom of the box yesterday on above average volume
  5. 5. Trade Strategy • Trade a reversal on a longer time frame • Wait for reversal confirmation to enter • Get lucky! (Positive news came out after already in the trade) • Trade the intraday uptrend
  6. 6. Intraday Fundamentals • TSLA trades with a Beta of 1.2, average volume of 10.6 million shares, and has an ATR of 7.4. • TSLA has a short interest of 50.7%. • TSLA is ranked by IBD as #1 in the automotive sector and has a grading of 72 78 97 C D D+. • There were recall rumors circulating in the morning that were later clarified that is was for software updates, nothing to do with the fires. • A headline that Tesla had 6900 car deliveries in Q4 caused the shares to pop. • Elon Musk’s appearance on CNBC later helped propel TSLA shares even higher throughout the day.
  7. 7. Longer Term Technicals
  8. 8. Shorter Term Technicals October pivot low Downtrend Channel
  9. 9. Intraday Technicals After the news pop TSLA retraced back to VWAP where it caught a bounce, then trended up the rest of the day News Pop Retrace and bounce off VWAP Double Bottom
  10. 10. Reading the Tape • I was using options for these trades so I used the tape to get a general idea for where buyers were supporting the bid and where sellers were stepping in whenever TSLA was near a key support or resistance level. • I noticed that TSLA put in a double bottom after selling off this morning, then traded up to the flat line where it consolidated just above VWAP. • Today was pretty easy to read the tape due to the volatility and volume.
  11. 11. Trade Management 6 1. 2. 3. 4. 5. 6. Bought 1 Call for 4.70 at 11:15 Bought 1 Call for 5.22 at 11:21 Sold 1 Call for 4.91 at 11:24 Bought 1 Call for 4.85 at 11:27 Sold 1 Call for 8.40 at 11:44 Sold 1 Call for 11.18 at 11:48 5 2 1 3 4 First Position using the Jan 24’14 139 Calls
  12. 12. Trade Management 2 1. 2. Bought 1 Call for 4.55 at 12:12 Sold 1 Call for 5.18 at 12:19 Second Position using the Jan 17’14 142 Calls 1
  13. 13. Trade Management 2 1 1. 2. Bought 1 Call for 3.50 at 12:21 Sold 1 Call for 4.97 at 12:37 Third Position using the Jan 24’14 150 Calls
  14. 14. Trade Management October pivot low 1. 2. Bought 1 Call for 4.63 at 2:30 Sold 1 Call for 5.05 at 3:00 1 Missed this move After closing third position, I took some tie to chill, eat lunch, and watch a Playbook presentation until about 2:00 Fourth Position using the Jan 17’14 155 Calls 2
  15. 15. Trade Management 2 1 1. 2. Bought 1 Call for 5.90 at 3:16 Sold 1 Call for 7.05 at 3:29 Fifth Position using the Jan 24’14 157.5 Calls
  16. 16. Trade Management 3 points October pivot low 2 points 4 points 9.5 points 1.5 points Summary of Intraday Involvement in Calls 20 points total captured
  17. 17. Trade Review • I was very happy with my entries and exits today trading TSLA. • I struggled with whether the trades were going to be intraday only or swing. I am content with my final decision to go flat TSLA at the end of the day. • After giving up all my profits yesterday on my swing positions, today I was completly okay with missing out on some of the moves. There are plenty of trades out there and I am much less stressed when I am in the trade only when it is going the right way. • I used two calls in the first position to scale in and out. Later I only used one call as the trades were basically momentum scalp trades. • These trades are scalable. When my portfolio increases I can put more money at risk to enter the trades with more calls and add to the positions.