GME - price closed <49 - continuation down - support zone 35-43
I am posting this chart to explain the weekly 46 puts I bought this morning. The video in my stream froze so the chart visual does not match my speaking.
First let me start by saying the green line and rectangle show an excellent call trade I took after posting the previous GME idea, in which I was looking for call trades. I also took a quick day trade last Friday, marked by the orange rectangle. Even though price closed over the downtrend line marked on previous chart (linked), it stayed sideways in the 49-51 zone long enough that I decided to wait for a new indication of direction.
The red arrows show a bearish engulfing candle, along with an RSI test and fail at 50. This gives me something to look for. This morning I got a signal. The opening 30m candle broke the blue support line and price closed below 48.30.
I bought weekly 76 puts for a day trade, which are up about 38% as I write this. Initially my exit was on price going over 48.50; now I have adjusted my exit stay green.
Switch to the daily chart and you will see the 35-43 support zone, which was the consolidation area before the massive price rise.
First let me start by saying the green line and rectangle show an excellent call trade I took after posting the previous GME idea, in which I was looking for call trades. I also took a quick day trade last Friday, marked by the orange rectangle. Even though price closed over the downtrend line marked on previous chart (linked), it stayed sideways in the 49-51 zone long enough that I decided to wait for a new indication of direction.
The red arrows show a bearish engulfing candle, along with an RSI test and fail at 50. This gives me something to look for. This morning I got a signal. The opening 30m candle broke the blue support line and price closed below 48.30.
I bought weekly 76 puts for a day trade, which are up about 38% as I write this. Initially my exit was on price going over 48.50; now I have adjusted my exit stay green.
Switch to the daily chart and you will see the 35-43 support zone, which was the consolidation area before the massive price rise.
Comment:
Price stalled in the 46 range, and eventually broke down below 45. I sold the weekly 46 puts for about 80% return. If price closes below 46 I will keep one contract overnight in case price drops further.
Trade closed manually:
Closed out the last put as price dropped below 44, over 100% gain. With stocks like this, you must ignore the social media noise and use your technical indicators. Price was slow to move lower, but it did, and it worked perfectly.
