Happy Monday, Traders
I hope you all had a fantastic Labor Day weekend filled with relaxation, quality time with loved ones, and a well-deserved break. I personally had a unconfined time. As Tuesday morning quickly approaches, It’s when to merchantry and time for preparation.
As it will be a short, four-day trading week, I am not expecting fireworks. As is usually the specimen in my experience, I expect a slower, less volatile week ahead. Of course, anything can happen, so stuff prepared is unchangingly a unconfined idea. However, it’s equally important to manage expectations.
Before I get into my top swing ideas for the week ahead, let’s transiently discuss last week’s action. Last week’s watch list went 2 for 2, as CVNA and CELH materialized and hit their targets. I strongly recommend playbooking each of those ideas and setups so that you can be largest prepared to react therefrom next time and largest familiarize yourself with the variables that make up each setup.
Here are two new ideas for the week that I like. As it is a short week, I am managing my expectations as mentioned whilom and not expecting any fireworks.
Carvana (NYSE: CVNA)
Last week’s top long idea worked out well equal to the plan. However, this week, I am not looking for a long but rather a short opportunity in the name.
While the surly sentiment remains strong in the stock, as the stock is now up scrutinizingly 1000% year-to-date, with upper short interest and surly consensus reviewer ratings and estimates, I think that without last week’s surge higher, the stock might need to take a breather.
After five straight untried days, with the stock hovering near a hair-trigger resistance zone, I am looking for a pullback and short-swing opportunity.
My Trade Plan:
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of unrepealable market factors such as liquidity, slippage and commissions.
I have two potential entry triggers for this idea. Firstly, I will squint for the stock to push up near $52 and goof on the hourly time frame, thereby confirming a lower high. If that lower upper is confirmed, I will get short versus the upper of the lower high. Without that, I will add to my short position on the short-term uptrend unravel at $50, which would act as wool confirmation for my idea. My stop would remain near the lower high, possibly virtually $52.
For exits, I am looking to imbricate risk and half of my position at $48, Thursday low, and key support level. For the remainder of my position, I would scale out towards $45, tent an equal value at each number from $48 to $45. My stop will be lowered to $50 once I imbricate the first half at $48.
The second entry trigger would be if the stock consolidated near $50 and tapped unelevated $50 and the uptrend. I would then get short versus the day’s upper and siphon out the word-for-word profit target plan outlined in the first entry idea. I would moreover lower my stop to $50 once the first profit target of $48 was achieved.
Affirm (NASDAQ: AFRM)
Shares of AFRM were up scrutinizingly 23% last week and up scrutinizingly 40% on the quarter without the visitor write-up earnings and gave optimistic guidance for the current quarter.
Although the stock has been rocketing, analysts don’t seem to stipulate with the price action. AFRM has a consensus reviewer rating of Hold and a consensus price target predicting scrutinizingly 27% of downside, based on the $15.78 price target.
It’s an interesting setup and narrative. However, I am not looking to invest here but rather just looking for a pullback short similar to CVNA. I’m interested in the short here without the stock rallied significantly over the past two weeks and is unescapable a major potential zone of resistance between $22 and $23.
My Trade Plan:
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of unrepealable market factors such as liquidity, slippage and commissions.
This plan is very provisionary for me. I am looking for the stock to push higher, whilom $22, and fail. Without that, I want to see the stock hold unelevated VWAP / hold red intraday for a considerable time. If that price whoopee occurs, I will squint to short the stock versus the upper of the day, risking a maximum of $0.50, with my entry ideally virtually $21.80 – $22.
After that, the plan is to take profits near $20, a potential level of support. If the stock finds support at $20 and bases, I will imbricate my unshortened short. If the stock fails to hold $20, I will alimony on ⅓ of my short position and target $19 as the final exit for the remainder of the position.
Important Disclosures