NVDA Calls - move started yesterday. Watch for bull trap at 240.
Sorry I am late getting this out. I bought calls yesterday around 240-241 and held through the 2:00pm chop. Closed most of my weekly calls yesterday and holding two. Today I am buying swing calls.
White arrow marks the candle that caused Stochastic %K spike from under 20 to over 80 - this is my signal that a bullish move may come. Sometimes price continues up after the signal, while more often price first dips lower (shaking out sellers) before a solid tradeable move up.
Caution with total capital held overnight. If you buy today, suggested partial stops are below low of long green candle and below 239, depending on when you buy.
*** I am not using ylod (yesterday's low of day) as a stop because price may break 240 and then see buyers come in (this is a bull trap).
White arrow marks the candle that caused Stochastic %K spike from under 20 to over 80 - this is my signal that a bullish move may come. Sometimes price continues up after the signal, while more often price first dips lower (shaking out sellers) before a solid tradeable move up.
Caution with total capital held overnight. If you buy today, suggested partial stops are below low of long green candle and below 239, depending on when you buy.
*** I am not using ylod (yesterday's low of day) as a stop because price may break 240 and then see buyers come in (this is a bull trap).
Trade active:
Bought 14Apr 260 calls.
On daily chart, price closed at 200sma yesterday and today I am looking for price to close higher (ideal) or over 240. When you see stochastic %K on daily - how low it is - there will be at least a tradeable bounce back up to 20sma at least.
*** My stochastic settings are %K=10 and %D=7
On daily chart, price closed at 200sma yesterday and today I am looking for price to close higher (ideal) or over 240. When you see stochastic %K on daily - how low it is - there will be at least a tradeable bounce back up to 20sma at least.
*** My stochastic settings are %K=10 and %D=7
Comment:
Price fell lower than 439 but I was watching SPY and it held 444. As I wrote above, the stochastic spike was followed by more selling to a lower low on 30min chart, and next two candles will show if it is bullish divergence on RSI. Directional volume shows heavy selling so I am waiting for price to make at least a bounce and buyers to come in. 244 is realistic on 30min chart as price did not close at/above 20sma yet.
Comment:
Cut this one for a loss. Price did not want to turn. I should have bought more HD calls :)
Trade closed manually:
In hindsight, I should have trimmed my position and/or held the calls since expiry was next week and I would have had a very small loss in the afternoon. I was hesitant to switch to calls so instead I bought SPY calls for an afternoon day trade.
I appreciate those who make time to read my ideas, so it is only fair that I also admit a clear mistake. Many of my best option trades happen because I buy early (based on my indicators) and wait for price to move in my direction. This time NVDA dropped more than I had anticipated and I was willing to wait for the turn, until I wasn't. My mistake was that I became swayed by the immediate price action instead of sticking to my original trade idea. If you can take a lesson from this, it is to be firm with your reasons/plan for a trade and use them as your guide while your trade progresses.
I appreciate those who make time to read my ideas, so it is only fair that I also admit a clear mistake. Many of my best option trades happen because I buy early (based on my indicators) and wait for price to move in my direction. This time NVDA dropped more than I had anticipated and I was willing to wait for the turn, until I wasn't. My mistake was that I became swayed by the immediate price action instead of sticking to my original trade idea. If you can take a lesson from this, it is to be firm with your reasons/plan for a trade and use them as your guide while your trade progresses.