SMCI - consolidated - ? Continuation or ? Reversal
SMCI has been on an impressive trend up since the first day of the trading year. On the 15
minute chart It had a healthy 12% pull back about February 22-29 but then rallied again on
a reversal upside to nearly the ATH of $ 1075 set on Friday 2/16. I note that traders like
to trade SMCI on Fridays and likely are chasing same day expiration call options. I know this
because I have been one of them. SMCI is now in a high tight bull flag pattern. Typically
this is bullish for another leg up of equal magnitude after consolidation. I will suppose
the probability of a breakout higher is 75% and breakdown 25%. I may play this with
a set of stop orders. A buy stop at $ 1030 and a sell stop at $ 1005 with a share proportion
set equally. When SMCA breaks from the consolidation one of the two orders will trigger
while the other will be in play until cancelled or triggered. My bullish bias is that the buy stop
will trigger and I will miss only a small piece of the price action in the initial continuation.
I will assess for a call option trade upon continuation. The volatility indicator helps me pick
entries with an alert set for volatility beyond the running mean either bullish or bearish.
minute chart It had a healthy 12% pull back about February 22-29 but then rallied again on
a reversal upside to nearly the ATH of $ 1075 set on Friday 2/16. I note that traders like
to trade SMCI on Fridays and likely are chasing same day expiration call options. I know this
because I have been one of them. SMCI is now in a high tight bull flag pattern. Typically
this is bullish for another leg up of equal magnitude after consolidation. I will suppose
the probability of a breakout higher is 75% and breakdown 25%. I may play this with
a set of stop orders. A buy stop at $ 1030 and a sell stop at $ 1005 with a share proportion
set equally. When SMCA breaks from the consolidation one of the two orders will trigger
while the other will be in play until cancelled or triggered. My bullish bias is that the buy stop
will trigger and I will miss only a small piece of the price action in the initial continuation.
I will assess for a call option trade upon continuation. The volatility indicator helps me pick
entries with an alert set for volatility beyond the running mean either bullish or bearish.
Comment:
Excellent web article from the trading group Trader Lion on the high tight flag pattern traderlion.com/techn...-tight-flag-pattern/
Trade active:
Going after VWAP bounces and rejections. great range about 15%. Calls are expensive but pay well. Recirculating sells into the next buy. Risky strategy
but high rewards.
but high rewards.
Comment:
Zig Zagging trades on zoom in reflecting VWAP band strategy with alerts and notifications to minimize screen time while multitasking
Trade active:
SMCI looks to be setting up for another long entry= last two candles are green Doji and better RSI holding above 50 GTG IMO