JICPT| Chewy tumbled on disappointed Q2 earing & Q3 forecast
Hello everyone. This is a follow-up post of Chewy that I published two weeks ago. Actually, price reached 97.76, but missed my target 1 of $100 due to disappointed Q2 earning report. The less-than-expected data made the stock gapped down almost 10% at $79.31.
Now, the stock has come to the 61.8% fib retracement. We need to see how price will react to this level early next week. If it's violated, price tends to fall to the bottom of the range on the weekly(64-66).
Let' look at the fundamental part of the company. According to the CEO, Sumit Singh who is really bullish on the company's future, said that Chewy’s net sales per active customer was $404, up 13.5% compared with the same period last year and active customers of 20.1 million in the second quarter was 21.1% higher than in the second quarter in 2020. That info tells us that more customers who spend more.
Will you buy it?
Back to the trade management, sometimes we do have good setups, but it missed our target a bit before going against us. It hurts traders a lot. No matter how skillful you're, it just inevitable. But what we can do is trail stops and watch for the possible dangerous sign. Take this one as an example, if you look at the daily chart, you probably notice that price failed to challenge previous high of 97.76 before the earing report. It created a lower high structure indicating momentum is losing. That probably means somebody already knew the data and they tried to front run before everybody knows. That made the price fall from 97.76 to 86ish.
Another sign is price closed below the black dash line which separated the uptrend channel by half.
Risk management is key to trading business. Don't be too greedy. If you smell something is not right before key data announcement. Just get out to protect your principal and profit.
Now, the stock has come to the 61.8% fib retracement. We need to see how price will react to this level early next week. If it's violated, price tends to fall to the bottom of the range on the weekly(64-66).
Let' look at the fundamental part of the company. According to the CEO, Sumit Singh who is really bullish on the company's future, said that Chewy’s net sales per active customer was $404, up 13.5% compared with the same period last year and active customers of 20.1 million in the second quarter was 21.1% higher than in the second quarter in 2020. That info tells us that more customers who spend more.
Will you buy it?
Back to the trade management, sometimes we do have good setups, but it missed our target a bit before going against us. It hurts traders a lot. No matter how skillful you're, it just inevitable. But what we can do is trail stops and watch for the possible dangerous sign. Take this one as an example, if you look at the daily chart, you probably notice that price failed to challenge previous high of 97.76 before the earing report. It created a lower high structure indicating momentum is losing. That probably means somebody already knew the data and they tried to front run before everybody knows. That made the price fall from 97.76 to 86ish.
Another sign is price closed below the black dash line which separated the uptrend channel by half.
Risk management is key to trading business. Don't be too greedy. If you smell something is not right before key data announcement. Just get out to protect your principal and profit.
Comment:
After the 61.8% fib level failed to hold the price, it's likely to retest previous low of $64-$66
plan your trade and trade your plan
