Traders,
What an eventful week that confirmed the adjustments I have previously spoken about and employed to be right on the money. I’ll elaborate on that and share my top ideas for the week ahead, focusing on my precise trade plans for setups that might make significant directional moves.
Just before I share my top ideas, though. Let’s briefly recap the action and last week’s watchlist ideas. I was focusing predominantly on the short side that paid off last week, with exceptions to more defensive, in-play sectors like the energy sector. The ACB and CADL short ideas worked perfectly, and I urge you to go back and study them, as it’s a textbook backside swing short opportunity. Unfortunately, IBIT gapped up over resistance to start the week, voiding my plan, so there was no trade there. Two other swing trades I took on the week were a long in TPET from the low $0.20s and sold near $0.50 on Friday, along with a long in OXY from the low $69s and sold near $71 on Friday, both apart of a theme, rising oil prices and tensions in the middle east.
As we look ahead, it’s crucial to acknowledge the current market conditions. Following the significant sell-off across all sectors on Friday, I’m approaching this week with caution. At present, I don’t have any A+ swing ideas. We could potentially see a continuation to the downside or some digestion and consolidation. It’s essential to be prepared for any scenario and stay updated on the evolving situation in the Middle East.
Many sectors have begun to pull back significantly on a higher timeframe, and the leading sector, the QQQs, is continuing to consolidate. This week, I will avoid looking for long breakouts and instead focus on individual names and theme scenarios.
Small Cap Oil Stocks Heating Up
Several small-cap oil names surged higher on Friday. I closed out my long position in TPET after it doubled on Friday. Going forward, I’ll be monitoring a handful of small-cap names for potential consolidation, further upside, and squeeze potential as fear rises of growing tensions between Israel and Iran.
Eventually, I will be monitoring these for a swing short, but until we get lower highs and confirmation of a backside, I am open to a theme developing and playing out.
Here’s My Plan:
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
If TPET continues to consolidate above its multi-day VWAP and the $0.40 – $0.45 area, a liquidity trap / short squeeze scenario could see this squeeze out closer to $1. In that situation, I would look for another long entry targeting an intraday breakout with a stop at the low of the range, trailing my position on the 5-minute timeframe, and looking for a blowout toward $1+.
Alternatively, if tensions settle and energy continues to pull in, I look for pops toward potential resistance near $0.60 to fail and confirm a lower high for a 2-day swing short, targeting a move back toward $0.30.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
INDO and HUSA: Two additional small-cap oil stocks that saw some volume come in on Friday. Similar to the above plan, if INDO, for example, shows signs of staying power and a broader theme developing, I would need to see it trap and consolidate above $5. That would get me interested in a full day – 2-day long position for a move first above Friday’s high, and after that, scaling out of the long position as new intraday highs are made on the 5-minute timeframe, scaling out of the long as it extends greatly from VWAP.
On the flip side, should air come out of the name(s) and the theme not develop, I would look for a push over $5 to fail and intraday VWAP fail to hold, thereby looking for a short versus the previous high and a short swing targeting a move back to $3s.
Additional Backburner Ideas and Alerts Set In:
Pop in NXPL: It had a clean all-day fade on Friday, and there is a lot of overhead resistance now. I would set alerts for pushback to resistance near $2 – $2.30 for an intraday failure and short for a full-day swing.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
GLD / SLV: Gold and Silver with significant reversals on Friday. Tough names to trade and a ton of headline risk and uncertainties. However, from a strict technical analysis perspective, if either can push near the 2-day VWAP and confirm a lower high, I would take a stab at the short for continuation, looking for a full day – 2-day short swing, first targeting Friday’s low and after that trailing the stop using lower highs on the 5-minute timeframe and scaling out on new intraday lows.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
