CMT DAY TRADE SETUP – STOP AND GO FOR 2.19 : 1 MAX REWARD RATIO

Core Molding Technologies, Inc (CMT) announced earnings today. The company had an increase in year over year net income but a decrease in year over year sales. Its stock price saw extreme volatility during the first 30 minutes of trading, rising sharply then dropping sharply. There was a Stop and Go setup during the rise that provided a maximum reward-risk ratio of 2.19 to 1. See my analysis below.

CMT - Winning Day Trade Setup - Stop and Go - 05-11-2020

ACCOUNT OF EVENTS

The markets had a bearish open, with the Dow at -0.87 percent when I checked at 6:30 AM PT.

CNBC’s main headline read “Dow futures drop 200 points, following gains last week, on jitters about reopening the economy.” There was nothing fundamentally alarming about this headline, nor did it give me any clues for a sector play.

The morning’s top gainers were dominated by biotechnology stocks and healthcare related stocks.

APOP held the #1 spot. It was up on news that positive data regarding the use of its ApoGraft technology was published in Bone Marrow Transplantation, a peer reviewed journal.

MYOK was also interesting because it was up on positive news that it had met all endpoints in a Phase 3 study that it was conducting. I’ve traded successfully on positive news regarding Phase 2 studies, so I felt that this was similar enough for a good trade.

AMC was up on news that Amazon was considering buying the company. I decided to skip over this one because although I’ve seen AMC in the top gainers a number of times in recent months, the setups never came together. Plus, trading stocks on acquisition news is a hit or miss for me.

I also liked CYTK because it was up on news that one of its products had been given a Fast Track designation by the FDA.

I’ve seen AVYA make amazing, albeit slow runs up in the past so that immediately interested me. Unfortunately it had mixed news on it, with an earnings miss and a sales beat. Nevertheless, I put it on the back burner to trade if only if a really good setup developed.

I like to trade biotechnology stocks because of the strong price movements they tend to make. The problem this morning was there were so many interesting ones to choose from, that it was hard to narrow down my selection. When this happens I just go with the first one that caught my attention.

So I decided to focus on APOP.

CMT - Winning Day Trade Setup - Finviz 6:30 AM PT - 05-11-2020

Unfortunately it fell sharply below the VWAP right at the open. CYTK fell below the VWAP soon after. MYOK was already trading below the VWAP during pre-market and remained there. I missed a high of day breakout on AVYA.

At 6:39 AM PT I refreshed my view on Finviz as I normally do and I saw that CMT had risen to #3 from #9, up over 39 percent and with over 40,000 shares traded.

Since the news was mixed, I knew the trade would be riskier than usual. But I didn’t see any mention of exceeding or failing analyst expectations so that gave me a bit more confidence.

6:39 AM PT

CMT - Winning Day Trade Setup - Finviz 6:39 AM PT - 05-11-2020

6:35 AM PT

CMT - Winning Day Trade Setup - Finviz 6:35 AM PT - 05-11-2020

It made a strong run up and closed above $4.00, at $4.16.

I anticipated a Stop and Go or Bull Flag setup to form. I normally like to see the price push right below the whole dollar level, then place a buy stop market order at 1 cent above the whole dollar. Since the price was a little bit above that level, I needed to watch the next minute candle closely.

At 6:40 AM PT CMT opened higher at $4.24 but started pulling back. I reasoned that if it could close near $4.00, then $3.99 would be a good stop loss price. Had the price closed at a lower price, then I would have needed to re-evaluate the setup or move on to a different stock.

As the minute started coming to a close, I saw the price had touched down to $3.76, but was back up and about to close near $4.00. So I placed my buy stop market order. The newly established high was $4.24, so my entry price would be 1 cent above the nearest 5 cent interval, at $4.26 ($4.25 + $.01).

I was going for a reward-risk ratio of 2 to 1, so my target limit price was $4.80 [ (($4.26 – $3.99) x 2) + $4.26 ].

By the close of the minute CMT was at $4.05.

At 6:41 AM PT, CMT made a strong break upward, filling my buy order. I quickly went over to my open position and added my stop loss and limit orders with an OCO (Order Cancels Order) condition.

The price had blew past the 1 to 1 reward-risk ratio price of $4.53 [ (($4.26 – $3.99) x 1) + $4.26 ]. Normally, I would move my stop loss to break even at this point, but I saw the price swing so rapidly that I decided to wait for the next minute or two before doing so. I didn’t want to get whipsawed if the trade would turn out successful. I guess that could be a good reason why a 2 to 1 reward-risk ratio is widely recommended.

At 6:43 AM PT CMT made a strong push up, hitting a high at $4.77. Near the close of the minute I moved my stop loss to break even.

At 6:44 AM PT my limit order was filled, and CMT hit a high at $4.86 before dropping sharply.

NOTABLE DATA POINTS

Date: 05-11-2020

Day of week: Monday

Approximate market performance at open: Dow -0.87%, S&P 500 -0.79%, Nasdaq -0.66%

Company name: Core Molding Technologies, Inc

Symbol: CMT

Industry: Specialty Chemicals

Recent news date: 05-11-2020

Recent news headline: Core Molding Technologies Reports $11.8M Improvement In Net Income On 11.4% Lower Sales For The First Quarter 2020

Approximate performance before buy signal: +39.78%

Approximate volume before buy signal: 40,151

Float: 7.36 million shares

Setup: Stop and Go

Buy signal time: 6:40 AM PT

Entry time: 6:41 AM PT

Maximum exit time: 6:44 AM PT

Entry wait time: 1 minutes

Maximum exit wait time: 3 minutes

Order type: buy stop market

Entry price: $4.26

Stop loss price: $3.99

Maximum exit price: $4.85

Maximum reward-risk ratio: 2.19 to 1

Did I trade this setup? Yes

MRAM DAY TRADE SETUP – STOP AND GO FOR 2.41 : 1 MAX REWARD RATIO

Everspin Technologies, Inc (MRAM) announced earnings yesterday, beating expectations on both EPS (earnings per share) and revenue. Its stock price rose sharply during the first 15 minutes of trading today. The Stop and Go trade setup presented a 2.41 to 1 reward risk ratio. See my analysis below.

MRAM - Winning Day Trade Setup - Stop and Go - 05-08-2020

ACCOUNT OF EVENTS

The markets had a bullish open, with the Dow at +1.36 percent when I checked at 6:30 AM PT.

CNBC’s main headline read “Dow futures up 200 points even after record job losses as investors bet the worst has passed.” Although this did not give me any clues for a sector play, I concluded that perhaps investor and trader confidence was high.

The list of the morning’s top gainers on Finviz showed a bit of interesting choices.

PAR held the #1 spot. I usually skip over the top gainer if it has low volume by market open, but I checked its chart and news this time. It looked too thinly traded and choppy to me. It also failed to close above its VWAP. Yesterday, it had a revenue beat, but it also had an earnings miss, so I moved.

VUZI held the #2 spot. I had considerably more interest in it as it had great volume. I also saw it in the top gainers yesterday. Positive news regarding increasing popularity of its smart glasses in the healthcare industry was a possible catalyst for a good trade.

PVAC held the #3 spot. The good plays I’ve made in oil and gas so far were from the Independent Oil and Gas industry. This, plus the fact that the company announced a revenue miss yesterday caused me to skip it.

MRAM - Winning Day Trade Setup - Finviz 6:30 AM PT - 05-08-2020

Other stocks that interested me included CWH, PSTI and FBIO.

I’ve seen CWH present some good setups that I’ve missed in the past, but it announced an earnings miss yesterday so I skipped it as well. It would, however, end up making a decent move that I’ve logged in my data tracker.

I’ve seen PSTI a number of times in the top gainers. It had positive news regarding the start of phase 2 of a study it was conducting. I have, in fact, traded successfully on this type of news. Unfortunately I did not like how the chart looked at the time so I skipped it. It ended up making a nice move during the last half of the first hour, but by that time I had finished trading.

FBIO had some positive news regarding a license deal, but it was trading well below the VWAP already, so I skipped it.

After seeing a bull flag form on VUZI, I placed a buy stop market order, but when I refreshed my view of Finviz at 6:35 AM PT I saw that MRAM had come out of nowhere and shot up to the #2 spot.

MRAM - Winning Day Trade Setup - Finviz 6:35 AM PT - 05-08-2020

I checked the news and saw the earnings and revenue beats.

By the time I checked its chart (6:38 AM PT) it had already started pulling back after making a strong run up and testing $4.70. It looked like the familiar Stop and Go pattern that is quickly becoming one of my favorites.

I canceled my order on VUZI and put in a buy stop market order on MRAM at $4.71. My intended stop loss was at $4.49. I was going for a 2 to 1 reward-risk ratio so my intended target was $5.15 [ (($4.71 – $4.49) x 2) + $4.71 ].

At 6:40 AM PT MRAM pushed higher and my order was filled. I quickly added my stop loss and limit orders with an OCO (Order Cancels Order) condition.

At 6:41 AM PT MRAM hit a high of $5.06. I moved my stop loss to break even since the stock reached my 1 to 1 reward-risk ratio price of $4.93 [ ($4.71 – $4.49) + $4.71 ].

At 6:42 AM PT MRAM hit a high of exactly $5.15 and my target limit order was filled.

A very quick and successful trade. I wish all of them were like these.

NOTABLE DATA POINTS

Date: 05-08-2020

Day of week: Friday

Approximate market performance at open: Dow +1.36%, S&P 500 +1.13%, Nasdaq 0.00%

Company name: Everspin Technologies, Inc.

Symbol: MRAM

Industry: Semiconductors

Recent news date: 05-07-2020

Recent news headline: Everspin Technologies Q1 Adj. EPS $(0.050) Beats $(0.080) Estimate, Sales $10.100M Beat $9.600M Estimate

Approximate performance before buy signal: +32.81%

Approximate volume before buy signal: 61,338

Float: 17.43 million shares

Setup: Stop and Go

Buy signal time: 6:38 AM PT

Entry time: 6:40 AM PT

Maximum exit time: 6:43 AM PT

Entry wait time: 2 minutes

Maximum exit wait time: 3 minutes

Order type: buy stop market

Entry price: $4.71

Stop loss price: $4.49

Maximum exit price: $5.24

Maximum reward-risk ratio: 1.24 to 1

Did I trade this setup? Yes

IO DAY TRADE SETUP – BULL FLAG FOR -1 : 1 LOSS

ION Geophysical Corporation (IO) announced yesterday its Q1 earnings at $0.33 per share. This beat a Zacks estimate that the company would lose $0.93 per share. Its stock price rose sharply at the opening minute, then formed a bull flag. It broke briefly out of consolidation, but unfortunately the breakout was not sustained and resulted in a loss for me. See my analysis below.

IO - Losing Day Trade Setup - Bull Flag - 05-07-2020

ACCOUNT OF EVENTS

The markets opened with an upward bias, with the Dow at +1.09 percent when I checked at 6:30 AM PT.

CNBC’s main headline read “Dow jumps 300 points as investors bet on an economic rebound from the depths of the pandemic.” There was nothing fundamental in this headline that I felt could give me an edge. But I did see that oil was up 10 percent on a delayed quote, so I took note of that.

The list of the morning’s top gainers on Finviz showed stocks from several different industries, but IO, #1 spot holder, got my attention the most. It was up over 125 percent and traded over 4 million shares, great volume. Seeing previously that oil was up so high, I checked the news on it and saw the earnings beat. I was fairly confident that IO  would be a good play. The pre-market chart looked great as well, as the stock was above the VWAP and testing $3.50.

TTPH held the #2 spot also looked interesting to me, as biotechnology stocks always do. It was up 46 percent and traded over 800,000 shares, good volume. But it looked thinly traded on the chart and it was below the VWAP. It also was up on news that La Jolla Pharmaceutical (LJPC) made an offer to buy the company. In my experience, news of acquisitions tends not to be a great catalyst. So, I skipped it. But I will touch more on this later, as TTPH would have been the better choice.

IO - Losing Day Trade Setup - Finviz 6:30 AM PT - 05-07-2020

Out the gates, IO made a sharp rise and strong close, hitting a high of $4.10 and closing at $3.91. If I had entered a buy stop market order at $3.51 before the market opened, I would have walked away with a profit. But I’ve been burned a few times when trying to trade out the gates, so I need more data and experience before making these plays.

At 6:34 AM PT IO reached $4.29 before pulling back. Seeing that there was support around $3.80, I decided to put in a buy stop market order at $4.31, with an intended stop loss at $3.79.

IO consolidated and indeed held the $3.80 support. At 6:42 AM PT it broke out of consolidation, hitting a high of $4.36. Unfortunately, it did not push any higher and it hit my intended stop loss at 6:47 AM PT.

To make matters worse, I forgot to put my stop loss in. In a last ditch effort, I placed an OCO (Order Cancels Order) order with a stop loss at $3.49 and target at $3.79, so I can at least maintain just a loss ratio of 1 to 1. But the price quickly hit $3.49 at 6:50 AM PT.

This was a huge disappointment, as “all the boxes” were checked to make this a great looking setup. I have a feeling that I’ve seen IO disappoint in the past, but I don’t have any trade confirmations for it nor do I have data. Nonetheless, I will certainly log this in my data tracker and take note that IO may be one of those stocks that I need to avoid, at least for any setup that is not an opening breakout.

However, I will also log the winning setup that I missed at the opening minute. Perhaps when I gain more confidence, as well as a speedier broker I will trade this type of setup.

Unfortunately I misjudged the news on Tetraphase Pharmaceuticals Inc (TTPH), and should have noticed some slight differences from the acquisition news that I am use to seeing. First, it was merely an offer to acquire the company, not a finalized deal. Second, there was no price per share disclosed. Usually, acquisition news would include this piece of information and the stock usually already trades at this price in the pre-market. Third, apparently Tetraphase was already in talks with AcelRX (ACRX) to be acquired, so La Jolla essentially created a bidding a war, which turned out be be a powerful catalyst.

NOTABLE DATA POINTS

Date: 05-07-2020

Day of week: Thursday

Approximate market performance at open: Dow 1.09%, S&P 500 1.28%, Nasdaq 0.00%

Company name: ION Geophysical Corporation

Symbol: IO

Industry: Oil & Gas Equipment & Services

Recent news date: 05-06-2020

Recent news headline: Ion Geophysical (IO) Tops Q1 Earnings and Revenue Estimates

Approximate performance before buy signal: +145.21%

Approximate volume before buy signal: 11,436,589

Float: 10.77 million shares

Setup: Bull Flag

Buy signal time: 6:38 AM PT

Entry time: 6:42 AM PT

Stop loss time: 6:50 AM PT

Entry wait time: 2 minutes

Stop loss wait time: 8 minutes

Order type: buy stop market

Entry price: $4.31

Stop loss price: $3.79

Maximum exit price: $4.35

Loss ratio: -1 to 1

Did I trade this setup? Yes

RVP DAY TRADE SETUP – STOP AND GO FOR 1.1 : 1 MAX REWARD RATIO

News came out today that Retractable Technologies, Inc (RVP) was awarded a government contract to procure needles and syringes for a COVID-19 vaccination campaign. Its stock rose sharply during the first 15 minutes of trading. The setup provided a maximum reward-risk ratio of 1.1 to 1. I was going for a 2 to 1 reward-risk ratio and got stopped out at break even. See my analysis below.

RVP - Winning Day Trade Setup - Stop and Go - 05-04-2020

ACCOUNT OF EVENTS

The setup occurred on Monday, May 4 2020.

The markets opened with a downward bias, with the Dow at -1.10% when I checked around 6:30 AM PT.

CNBC’s main headline read “Dow futures fall more than 200 points to start the week, airline stocks drop on Buffett sale.” Unsure of how to play this, I took a mental note of Warren Buffett’s sale nevertheless. At the very least, I prepared myself for another potentially bearish day.

Several stocks in the biotechnology industry were in the morning’s top gainers on Finviz. Given the current Covid-19 situation, I wasn’t surprised. So I set out to sort through the list with that also in mind.

STML held the #1 spot. News came out today that it was being acquired for up to $12.50 per share. Already nearing $12.00, I assumed it would not move much higher, so I passed on it.

APDN held the #2 spot. The company announced positive results from their Covid-19 vaccine tests. It was coming off steeply from its pre-market high, but it was hovering at the VWAP for a potential bounce.

ANIX held the #3 spot. The company announced that it had identified a potential therapeutic candidate to treat Covid-19. But it was already far below the VWAP, so I passed on it.

So I decided to watch APDN out the gates.

RVP - Winning Day Trade Setup - Finviz 6:30 AM - 05-04-2020

APDN fell through support quickly. I didn’t write the stock off completely as it was still too early to tell.

But my refresh of Finviz at 6:35 AM PT revealed that RVP had come out of nowhere and jumped to the #4 spot, up over 16% and with over 500,000 shares traded.

RVP - Winning Day Trade Setup - Finviz 6:35 AM - 05-04-2020

I quickly checked the news section on my Thinkorswim trading app and saw the positive headline, then quickly went over to its chart.

At 6:35 AM PT RVP made a strong move toward $4.00, hitting a high of $3.96 and closing at $3.88.

At 6:36 AM PT it started pulling back. I watched it for about 30 seconds to confirm. I quickly entered a buy stop market order at $4.01, with an intended stop loss at $3.49.

My buy order got filled at 6:37 AM PT as the stock rose sharply again past $4.00. I went to my open position and added my stop loss. I went for a 2 to 1 reward-risk ratio, so I also put it in my target limit order at $5.05 [ (($4.01 – $3.49) x 2) + $4.01 ].

RVP continued its move up during the next few minutes. At 6:45 AM PT, it reached the 1 to 1 reward-risk ratio price of $4.53 [ ($4.01 – $3.49) + $4.01 ] so I moved my stop-loss to break even. Within the same minute, the stock at reached a high of $4.59.

Unfortunately the stock lost steam and hit my break even stop loss at 6:53 AM PT.

I was disappointed to have traded a setup that looked so good but not turn a profit. However, I am glad that I was able to manage the trade well. The setup itself is a winner as I could have made money had I went for a 1 to 1 reward-risk ratio. When another opportunity to trade RVP comes I’ll keep this in mind.

NOTABLE DATA POINTS

Date: 05-04-2020

Day of week: Monday

Approximate market performance at open: Dow -1.10%, S&P 500 -0.81%, Nasdaq -0.63%

Company name: Retractable Technologies, Inc.

Symbol: RVP

Sector: Medical Instruments and Supplies

Recent news date: 05-04-2020

Recent news headline: Retractable Technologies has been Awarded an $84M Government Contract for Procuring Needles and Syringes for a COVID-19 Mass Vaccination Campaign

Approximate performance before buy signal: +16.10%

Approximate volume before buy signal: 505,157

Float: 8.90 million shares

Setup: Stop and Go

Buy signal time: 6:36 AM PT

Entry time: 6:37 AM PT

Maximum exit time: 6:45 AM PT

Entry wait time: 1 minutes

Max exit wait time: 8 minutes

Order type: buy stop market

Entry price: $4.01

Stop loss price: $3.49

Maximum exit price: $4.58

Maximum reward-risk ratio: 1.1 to 1

Did I trade this setup? Yes

MDGS DAY TRADE SETUP – VWAP BOUNCE AND HIGH OF DAY BREAKOUT FOR 1.45 : 1 MAX GAIN RATIO

Medigus Ltd (MDGS) announced today that it recently received its first commercial order for COVID-19 serological test kits. Its stock traded heavily today during the first hour of trading, bouncing off the VWAP and briefly trading above $5.00 before making a gradual decline that lasted through the day. The short lived move provided traders an opportunity to achieve a maximum gain-loss ratio of 1.45 to 1. See my analysis below.

MDGS - Winning Day Trade Setup - VWAP Bounce and High of Day Breakout - 05-01-2020

ACCOUNT OF EVENTS

The setup occurred on Friday, May 1, 2020.

At 6:30 AM PT I checked my TD Ameritrade app to see how the markets were doing. There was negative bias, with the Dow at -1.77%.

I headed over to CNBC to see if there was any news to aid me in my trades today. There didn’t seem to be anything fundamental as the main headline read “Dow set to fall more than 400 points after best month in three decades, Amazon leading tech lower.”

I opened up Finviz to see this morning’s top gainers. There were only a handful of stocks that were up 10 percent or more, which is not unusual for a Friday. Even less so were the number of attractive stocks. Sometimes I actually prefer this, as it makes it less complicated to narrow down, especially when one of them has glaring positive news on it.

Right at the #1 spot was MDGS, up over 82 percent with nearly 6 million shares traded. The news was quite positive. I figured it was a good catalyst since the US’ struggles with Covid-19 testing have been well publicized. I placed it at the top of my mental short list.

Myomo (MYO) held the #2 spot and had great volume, but there was no news on it. There was negative news on it a few weeks ago, so I didn’t write it off completely, as it could have possibly been a good recovery play. I have, in fact, traded that stock successfully in the past.

Akari Therapeutics (AKTX)  held the #3 spot. It had positive news on it, but it was well below the VWAP already and didn’t have much volume.

I watched these stocks for the first 10 minutes of trading. MYO and AKTX sold off hard while MDGS was oscillating across the VWAP. I decided to lock onto this one and ignore the others.

At 6:41 AM PT it popped up sharply above the VWAP and touched $4.41. Then, at 6:42 AM PT it pulled back and touched $4.00. With this in mind, I placed a buy stop market order at $4.46 with an intended stop loss at $3.99.

MDGS then made some big strides up, filling my buy order at 6:45 AM PT. I added my stop loss soon after. Since I was going for a 2 to 1 gain-loss ratio I placed my target limit order at $5.40 [ (($4.46 – $3.99) x 2) + $4.46 ].

At 6:47 AM PT the stock broke its high of day. It then bull flagged and pushed as high as $5.15 at 6:52 AM PT. I moved my stop loss to break even because the stock reached my 1 to 1 gain-loss ratio price of $4.93 [ (($4.46 – $3.99)) + $4.46 ].

I was hoping MDGS was reach my 1.5 to 1 gain-loss ratio price of $5.17 [ (($4.46 – $3.99) x 1.5) + $4.46 ] so I could move my stop loss to $4.93 and lock in a 1 to 1 gain-loss ratio. Unfortunately it never did and I got stopped out at break even at 7:09 AM PT.

Anyone who was going for a 1 to 1 gain-loss ratio would have profited from this setup. So although I myself did not profit, I am logging this as a winning setup in my data tracker.

NOTABLE DATA POINTS

Date: 05-01-2020

Day of week: Friday

Approximate market performance at open: Dow -1.57%, S&P 500 -1.75%, Nasdaq -2.05%

Company name: Medigus Ltd.

Symbol: MDGS

Sector: Medical Appliances and Equipment

Recent news date: 05-01-2020

Recent news headline: Medigus and L1 Systems Received First Commercial Order for COVID-19 Testing Kits

Approximate performance before buy signal: +75.05%

Approximate volume before buy signal: 14,492,009

Float: 2.33 million shares

Setup: VWAP Bounce and High of Day Breakout

Buy signal time: 6:43 AM PT

Entry time: 6:45 AM PT

Maximum exit time: 6:52 AM PT

Entry wait time: 2 minutes

Exit wait time: 7 minutes

Order type: buy stop market

Entry price: $4.46

Stop loss price: $3.39

Maximum exit price: $5.14

Maximum gain-loss ratio: 1.45 to 1

Did I trade this setup? Yes

MRKR DAY TRADE SETUP – VWAP BOUNCE AND HIGH OF DAY BREAKOUT FOR 2.5 : 1 MAX GAIN RATIO

Marker Therapeutics, Inc (MRKR) announced yesterday that the FDA granted its “Orphan Drug” designation to MT-401, one of the company’s drugs used to treat patients with acute myeloid leukemia (AML), following allogeneic stem cell transplant. Its stock price consolidated during the first half hour of trading before making a break above the VWAP. It then proceeded to make a slow break above its high of day, and a final bounce before a sharp rise upward a little past 8:00 AM PT. The setup provided a maximum gain-loss ratio of 2.5 to 1. I entered late and and achieved a 1 to 1 gain-loss ratio. See my analysis below.

MRKR - Winning Day Trade Setup - VWAP Bounce and High Of Day Breakout - 04-30-2020

 

ACCOUNT OF EVENTS

The setup occurred on Thursday, April 30, 2020.

At 6:30 AM PT I saw that the markets were down, with the Dow Jones Industrial Average at -1.03%.

A headline on CNBC read, “Dow futures fall more than 300 points as jobless toll from virus tops 30 million.”

There was surely a bearish outlook for the day, so I knew I had to be extra diligent about finding stocks with a solid pattern and positive fundamental news on it.

I headed on over to Finviz to check out the morning’s top gainers. Unfortunately the choices did not seem very attractive at the time. They either had great patterns but no news on them, or great news with terrible patterns, including MRKR, which was at the #5 spot. It was up over 21 percent and traded over 300,000 shares. Unfortunately it sold off hard below the VWAP so I passed on it.

I spent much of my morning just waiting it out, refreshing Finviz every 5 minutes, but everything seemed to come up short. I entered an order on a stock that seemed to recovering from bad news, but the pattern couldn’t hold and I canceled my order. I even ended up missing a good trade on another stock (MTDR – setup logged in my data tracker). MRKR had fallen off the radar, dropping down to the #11 spot at one point.

I was about to chalk it up as just one of those lackluster mornings, which I suppose is not uncommon on bearish days such as this.

But then at 7:19 AM PT I saw that MRKR had jumped back up to the #3 spot on Finviz, up over 27% and over 1 million shares traded. I checked its chart and saw that it had already made a bounce off the VWAP as well as two bull flag poles. Usually by this time I would consider it too late to enter, but the stock had just broken through its high of day and was still under $3.00. I gambled on the chance that the positive news could squeeze it up considerably past $3.00.

At 7:20 AM PT the stock pulled back, hitting a low of $2.85. The recent high was $2.93 so I put in a buy stop market order at $2.96, the next 5 cent level plus 1. My intended stop loss was $2.79, the nearest 10 cent level below minus 1. I was going for a 2 to 1 gain-loss ratio so my intended target limit order was $3.30 [ (($2.96 – $2.79) x 2) + $2.96 ].

At 7:21 AM PT MRKR turned from red to green during consolidation. It spent a few minutes at the $2.90, during which I was able to add  my stop loss and target limit levels to my open order with an OCO (Order Cancels Order) condition.

My buy order eventually got filled at 7:26 AM PT. At 7:27 AM PT MRKR hit $2.99. I began to cheer silently as I anticipated a breakout above $3.00 within the next few minutes.

But at 7:27 AM PT MRKR pulled back rather strongly, then seemed to be losing steam as it struggled to stay above $2.90. It touched $2.99 again at 7:36 AM PT. I breathed a sigh of relief as I thought resistance had been finally worn down, but the stock made yet another strong pull back, hitting $2.81 at 7:39 AM PT.

I felt my stop loss would eventually be hit as MRKR kept trending downward. At 7:49 AM PT it hit $2.80. A loss seemed inevitable.

But to my amazement, support held at $2.80 and not a penny less. MRKR reversed off the VWAP, also at $2.80, making a slow and steady comeback.

At 8:01 AM PT, MRKR ripped past $3.00, hitting a high of $3.20. I moved my stop loss to break even because the stock reached a 1 to 1 gain-loss ratio price, which was $3.13 [ (($2.96 – $2.79) + $2.96) ].

Furthermore, I like to move my stop loss to lock in a 1 to 1 gain-loss ratio once a stock reaches the 1.5 to 1 gain-loss ratio price, which was $3.21 [ (($2.96 – $2.79) x 1.5) + $2.96) ]. MRKR reached $3.22, so I quickly moved my stop loss to $3.13.

MRKR could not push any higher and my stop loss was hit at 8:05 AM PT. Not the gain I was shooting for but a gain regardless, and I was happy that I practiced good trading mechanics.

Looking back at the chart, I realized that I could have achieved a 2 to 1 gain-loss ratio if I had paid more attention to the stock and put in a buy order at $2.91 when the stock pulled back slightly at 7:15 AM PT. By that time it held a respectable #8 spot on Finviz, up over 21 percent and with over 800,000 shares traded. Hopefully as I get more seasoned I will become better at spotting these opportunities. For this reason, I will log the setup with a $2.91 entry in my data tracker.

NOTABLE DATA POINTS

Date: 04-30-2020

Day of week: Thursday

Approximate market performance at open: Dow -1.03%, S&P 500 -0.68%, Nasdaq -0.03%

Company name: Marker Therapeutics, Inc.

Symbol: MRKR

Sector: Biotechnology

Recent news date: 04-29-2020

Recent news headline: Marker Therapeutics Receives FDA Orphan Drug Designation for its Multi-Antigen Targeted T Cell Therapy for Acute Myeloid Leukemia

Approximate performance before buy signal: +21.67%

Approximate volume before buy signal: 859,878

Float: 31.77 million shares

Setup: VWAP Bounce and High of Day Breakout

Buy signal time: 7:16 AM PT

Entry time: 7:19 AM PT

Maximum exit time: 8:03 AM PT

Entry wait time: 3 minutes

Exit wait time: 44 minutes

Order type: stop market buy

Entry price: $2.91

Stop loss price: $2.79

Maximum exit price: $3.21

Maximum gain-loss ratio: 2.5 to 1

Did I trade this setup? Yes, with late entry

CMRX DAY TRADE SETUP – VWAP BOUNCE AND HIGH OF DAY BREAKOUT FOR 3.34 : 1 MAX GAIN RATIO

Chimerix, Inc. (CMRX) announced today that it is beginning phase 2 of 3 of its study of dociparstat sodium (DSTAT) to reduce excessive anti-inflammatory responses in patients with severe Covid-19 infection. The announcement came a day after it announced that the FDA approved the aforementioned study. Its stock price traded back and forth along the VWAP during much of the first hour before breaking its high of day. It surged even higher a little past the first hour. The setup yielded a maximum gain-loss ratio of 3.34 to 1. See my analysis below.

CMRX - Winning Day Trade Setup - VWAP Bounce and High of Day Breakout - 04-29-2020

 

ACCOUNT OF EVENTS

The setup occurred on Wednesday, April 29, 2020.

I usually get up really early in the morning to do my routine before the markets open, but I forgot to set my alarm last night, and I woke up right when the markets opened.

So I jumped out of bed to grab my phone and start putting together my trading setup.

At 6:32 AM PT I checked how the markets were doing. There was strong upward bias as all three major indices were up more than one percent, with the Dow Jones Industrial Average at +1.52%.

Next, I headed over to CNBC to check for any major news that would aid me in my trading today. A headline read “Dow surges more than 400 points as positive Gilead news lifts hope for coronavirus treatment.” Gilead is a big, slow moving stock so I knew I wouldn’t be trading it. However, I had a feeling that the news would push up smaller stocks in the biotechnology. So, I made a mental note of that.

Then I headed over Finviz to check out the list of top gainers. Indeed, there was a biotechnology stock (CAPR) that was in the number 1 spot. It had positive news on it, so I looked at its chart. Unfortunately it was selling off below the VWAP a bit, so I passed on it. It would eventually make a powerful move up later in the morning. I missed that trade but I have logged the setup in my data tracker.

I moved on to the remaining top gainers, which turned out to be disappointments. Many of them had false breakouts. So I waited it out, refreshing my view on Finviz every 5 minutes.

At 6:44 AM PT I saw that CMRX had jumped up to the number 4 spot on the list. I checked its chart. It had made a strong close at $2.07, its high of day at that moment. It was up over 34% and traded over 3 million shares. I saw the positive news on it and started looking for my opportunity to enter a trade.

But then it started selling off, going back below the VWAP reaching as far down as $1.88. Since it was both below the VWAP and that critical whole dollar support ($2.00) that I like to see, I wrote the stock off and started looking at other stocks.

The charts on the other stocks did not look interesting either though, and I spent the next several minutes just waiting. I was about to think that it would be a lackluster morning, but at 7:09 AM PT I saw that CMRX at shot back up to the number 2 spot on Finviz, up over 34% again and had over 5.5 million shares traded.

I checked the chart and I saw that it had touched $2.07 again before dropping back down to the VWAP. Seeing that it touched this exact price twice, I had a feeling that if it could make a strong bounce off the VWAP it could break past this level, which could have opened up a window for a rally.

At 7:12 AM PT the stock did in fact make a strong bounce off the VWAP. I then closed higher with each minute testing $2.07 once again at 7:16 AM PT.

I quickly put in a buy stop market order at $2.11, with an intended stop loss at $1.99. CMRX then broke past $2.10 at 7:17 AM PT, and my order was filled.

I quickly went  to my open position and added my stop loss price with an OCO (Order Cancels Order) condition. Since I was shooting for a 2 to 1 gain-loss ratio I added my target limit price of $2.35 [ (($2.11 – 1.99) x 2) + $2.11 ].

CMRX pulled back between 7:20 AM PT and 7:23 AM PT before pushing higher. It then exploded past $2.20 and $2.30 at 7:31 AM PT, during which time my target limit order was filled. I didn’t even have time to move my stop loss to break even. The stock continued to push higher during the next several minutes, eventually reaching a maximum exit price of $2.61.

While I am happy with the result of this trade, I think I entered it a little early. Normally I would wait for a pullback after a strong price movement, but I didn’t this time. I’ll chalk it up to simply not following the rules in the heat of the moment.

Looking back at the chart, I see a safer entry at $2.21. The buy signal would have been the switch from red candle to green candle at 7:21 AM PT during the pullback. The stop loss price would have been $2.09, a penny below the ten cent level at the bottom of the pullback. The target limit price for a 2 to 1 gain-loss ratio would have been $2.45 [ (($2.21 – $2.09) x 2) + $2.21 ], which would have been reached at 7:32 AM PT.

Since one of the goals of this blog is to cover clean and clearly defined setups, I have entered the data of the more conservative setup on this post, but recorded the data for both setups in my tracking log.

NOTABLE DATA POINTS

Date: 04-29-2020

Day of week: Wednesday

Approximate market performance at open: Dow +1.52%, S&P 500 +1.85%, Nasdaq +2.13%

Company name: Syndax Pharmaceuticals, Inc.

Symbol: CMRX

Sector: Biotechnology

Recent news date: 04-29-2020

Recent news headline: Chimerix Announces Initiation of a Phase 2/3 Study of DSTAT in Acute Lung Injury for Patients with Severe COVID-19

Approximate performance before buy signal: +39.74%

Approximate volume before buy signal: 6,752,489

Float: 50.62 million shares

Setup: VWAP Bounce and High of Day Breakout

Buy signal time: 7:21 AM PT

Entry time: 7:30 AM PT

Maximum exit time: 7:46 AM PT

Entry wait time: 9 minutes

Exit wait time: 16 minutes

Order type: stop market buy

Entry price: $2.21

Stop loss price: $2.09

Maximum exit price: $2.61

Maximum gain-loss ratio: 3.34 to 1

Did I trade this setup? Yes, with early entry

SNDX DAY TRADE SETUP – STOP AND GO FOR 3.02 : 1 MAX GAIN RATIO

Syndax Pharmaceuticals, Inc (SNDX) announced yesterday that it saw positive clinical results for SNDX-5613, a drug that it has been developing to treat patients with genetically-defined acute leukemias. Within the first ten minutes of trading today, the company’s stock made a Stop and Go pattern, then a move up that was sustained through the first hour. Using my stop loss rules, the setup provided me with a maximum gain-loss ratio of 3.02 to 1. For traders who use looser stop losses, there was an opportunity for a reward of over 9x the risk. See my analysis below.

SNDX - Winning Day Trade Setup - Stop and Go - 04-28-2020

ACCOUNT OF EVENTS

The setup occurred on Tuesday, April 28, 2020.

I started my day checking the markets at 6:30 AM PT. There was upward bias, as all three major indices were positive, with the Dow Jones at +1.55 percent.

I checked CNBC for any news that could assist me with determining how to trade. There didn’t seem to be anything distinctively fundamental, just a headline that merely stated the obvious – “Stocks are set to add to Monday’s gains with Dow futures up more than 400 points.”

Next, I checked Finviz to try and pick out a stock to trade from the list of top gainers. SNDX was number 4 on the list. It was up 21.81%, but it only traded 69,149 shares, so I quickly skip it and look at other stocks that were trading more heavily. There were a handful of them with positive news to serve as potential catalysts, but they were already trading far below the VWAP.

By 6:35 AM PT I had circled back to SNDX and saw that it traded over 168,000 shares, and it moved up to the number 3 spot. I checked its chart and saw that it kept closing higher with each minute to that point. I checked the news on it and saw a headline that read “The Daily Biotech Pulse: Pfizer Earnings, Roche’s Spinal Muscular Dystrophy Treatment, Moderna COVID-19 Vaccine Update.” Since the headline didn’t mention SNDX specifically, I decided to do a quick read of the article, which indeed mentioned that the company announced positive clinical trial results of its drug, and that the the FDA had granted it the Orphan Drug Designation.

Convinced that this was the stock to go with, I monitored it carefully and waited for my opportunity to enter.

The stock kept closing ever higher and I was afraid that this would be a run away breakout, but at 6:38 AM PT SNDX made a strong run up to $15.99, and closed at $15.78. During the next minute it touched $16.00 and started to pull back slightly. I monitored it for 30-40 seconds and anticipated that it would remain between $16.00 and $16.50, so I quickly put in a buy stop market order at $16.01 with an intended stop at $15.49 once the order got filled. I was shooting for a 2 to 1 gain-loss ratio so my intended target limit order was $17.05 [ (($16.01 – $15.49) x 2) + $16.01 ].

At 6:40 AM PT SNDX made a strong break above $16.00, reaching a high of $16.90 and closing at $16.77. I like to to move my stop loss to breakeven once a stock reaches a 1 to 1 gain-loss level, which in this case was $16.53 [ ($16.01 – $15.49) + $16.01 ], so as soon as I saw the price blowing past this level I put went to my open position and added my breakeven and limit order levels with an OCO (Order Cancels Order) condition. I barely had enough time to do this. In fact, I think I missed the profit taking window at 6:41 AM PT when the price reached $17.35, or maybe it was my broker being slow at processing my order.

At 6:42 AM PT SNDX moved lower, touching $16.23. I was a bit frustrated because my target limit order had not been filled, but relieved that if the stock moved even lower I would at least break even. But thankfully it moved higher and my limit order was filled at 6:43 AM PT.

If I would have held on longer in search of a higher gain, my break even stop loss would have been hit at 6:45 AM. For traders using looser trailing stops, there was an opportunity for a reward of 9x the risk. Since I’m trying my best to adhere to my own rules of day trading, I will log the conservative maximum exit price of $17.58 that occurred at 6:44 AM PT, for a maximum gain-loss ratio of 3.02 to 1.

NOTABLE DATA POINTS

Date: 04-28-2020

Day of week: Tuesday

Approximate market performance at open: Dow +1.55%, S&P 500 +1.42%, Nasdaq +1.10%

Company name: Syndax Pharmaceuticals, Inc.

Symbol: SNDX

Sector: Biotechnology

Recent news date: 04-28-2020

Recent news headline: The Daily Biotech Pulse: Pfizer Earnings, Roche’s Spinal Muscular Dystrophy Treatment, Moderna COVID-19 Vaccine Update

Approximate performance before buy signal: +29.52%

Approximate volume before buy signal: 168,902

Float: 27.35 million shares

Setup: Stop and Go

Buy signal time: 6:39 AM PT

Entry time: 6:40 AM PT

Maximum exit time: 6:44 AM PT

Entry wait time: 1 minutes

Exit wait time: 4 minutes

Order type: stop market buy

Entry price: $16.01

Stop loss price: $15.49

Maximum exit price: $17.58

Maximum gain-loss ratio: 3.02 to 1

Did I trade this setup? Yes

VXRT DAY TRADE SETUP – BULL FLAG FOR 1.14 : 1 MAX GAIN RATIO

Vaxart, Inc.’s stock (VXRT) broke out of a bull flag pattern within the first half hour of trading today. The move came after news coverage mentioned that the company was in the preclinical stages for a coronavirus vaccine. While the breakout was not a powerful one, it did provide an opportunity for traders to receive a maximum gain-loss ratio of 1.14 to 1. See my analysis below.

VXRT - Winning Day Trade Setup - Bull Flag - 04-27-2020

ACCOUNT OF EVENTS

The setup occurred on Monday, April 27, 2020.

As the trading day opened I checked the major indices to get a feel for how the markets were performing. They were all up, with the Dow jones at +.54%. A headline on CNBC read “Dow futures rise more than 250 points as NY, other states start to make plans for reopening.” Overall, I felt there was an upward bias.

I checked Finviz for the morning’s list of top performing stocks. There were a handful of interesting choices, each with positive news that could potentially serve as a catalyst for a strong move up.

Unfortunately, all the stocks on my short list quickly sold off within the first few minutes of the, so I wiped the list clean. I refreshed my browser’s view on Finviz at 6:35 AM PT and I saw that VXRT, previously nowhere to be found amidst the top gainers, at the number six spot. It was up around 19% with over 2.5 million shares traded.

I checked the news section on my trading platform for any news on the stock, and saw the headline “Six Coronavirus Vaccines Under Clinical Trials, WHO Says.” The article was specific to the company, but it mentioned briefly that Vaxart, Inc. was in the preclinical stages for a coronavirus vaccine. Given the current situation, I felt it was a strong enough catalyst to enter a trade if the setup was there.

I checked the chart and indeed the stock made a strong move up, hitting a high of day of $3.75 at 6:35 AM PT.

At 6:38 AM PT, VXRT tested $3.80, then start pulling back, touching $3.63 for that minute’s low. I had a feeling that support would be at $3.60 so I put in a buy stop market order at $3.81 with an intended stop loss at $3.59.

Between 6:41 AM PT and 6:47 AM PT it indeed tested $3.60. I wanted to shoot for a 2 to 1 gain-loss ratio so I went to my open order and added my stop loss at $3.59 and limit at $4.25 [ (($3.81 – $3.59) x 2) + $3.81 ] with an OCO (Order Cancels Order) condition.

at 6:49 AM PT, VXRT broke above $3.80, filling my buy order. It continued its move up, testing $4.00 at 6:55 AM PT. I like to place my stops at my breakeven point once a stock reaches a 1 to 1 gain-loss ratio. In this case, that level was $4.03, but since it was so close the whole dollar level I moved my stop earlier than usual.

Unfortunately the stock could not push higher than $4.07. It peaked out at 6:56 AM PT, then hit my stop loss at 7:00 AM PT.

While I am disappointed that the stock did not reach my target, I am overall content with how the trade was read and managed. I followed my rules in validating and entering the setup, as well as trailing my stop losses.

As this setup had a maximum potential gain-loss ratio of at least 1 to 1, I am logging it in my data tracker as a winning setup, even though the way I traded it did not result in a profit for me.

NOTABLE DATA POINTS

Date: 04-27-2020

Day of week: Monday

Approximate market performance at open: Dow +0.54%, S&P 500 +0.75%, Nasdaq +0.91%

Company name: Vaxart, Inc.

Symbol: VXRT

Sector: Biotechnology

Recent news date: 04-24-2020

Recent news headline: Six Coronavirus Vaccines Under Clinical Trials, WHO Says

Approximate performance before buy signal: +19.87%

Approximate volume before buy signal: 2,541,756

Float: 67.20 million shares

Setup: Bull Flag

Buy signal time: 6:39 AM PT

Entry time: 6:49 AM PT

Maximum exit time: 6:56 AM PT

Entry wait time: 10 minutes

Exit wait time: 7 minutes

Order type: stop market buy

Entry price: $3.81

Stop loss price: $3.59

Maximum exit price: $4.06

Maximum gain-loss ratio: 1.14 to 1

Did I trade this setup? Yes

CHK DAY TRADE SETUP – VWAP BOUNCE, STOP AND GO FOR 3.6 : 1 MAX GAIN RATIO

Chesapeake Energy Corporation’s stock (CHK) has been rallying for the past few days, coinciding with the current rebound of oil prices. This morning, it made a strong bounce off the VWAP that provided traders with a maximum gain-loss ratio of 3.6 to 1. See my analysis below.

CHK - Winning Day Trade Setup - VWAP Bounce, Stop and Go - 04-24-2020

ACCOUNT OF EVENTS

The setup occurred on Friday, April 24, 2020.

At 6:30 AM PT I checked overall market performance and saw that there was positive bias, with the Dow Jones Industrial average up around 0.77 percent.

Next I went over to CNBC for any news that could have help me in today’s trading decisions. The headline read “Dow futures jump 150 points as oil continues rebound from historic lows.” With that in mind, I was hoping to see see some oil stocks in the morning’s top gainers.

Sure enough, I see CHK in the top five list on Finviz, up 26 percent with over 300,000 shares traded. I placed particular interest on this stock not only because of the positive news surrounding oil prices, but it was also a top performer yesterday, during which I was able to capitalize on in the late morning. It has been my personal experience that a stock that is on the radar for a second consecutive day usually provides opportunities for additional gains before it fades.

I checked for recent news specific to CHK. A negative sounding headline registered yesterday afternoon. It read “Chesapeake Adopts Poison Pill After Shares Drop on Oil Rout.” Given how the stock had been performing well recently, I open the article to obtain more details and see if I was entering into a bad trade. The article stated that the company took actions to “thwart any takeover attempts.” This can actually be positive news for some shareholders. The ambiguity of the news, lead me to place more weight on the general news regarding the oil price rebound.

The stock did a short bounce off the VWAP during the first few minutes of trading but quickly sold off a bit below it by 6:49 AM PT. but it reversed off this low just as quickly and closed back above the VWAP by 6:54 AM PT. Not completely convinced that the upward movement would continue, I decided to let the setup develop a little more.

I didn’t have to wait long. CHK tested the VWAP for 2 minutes before making a strong push up, touching $37.00 at 6:57 AM PT. It then pulled back during the next minute, testing $36.00. Seeing these resistance and support levels at the whole dollar levels, I quickly put in a buy stop market order at $37.01, with an intended stop loss at $35.99. I went for a 2:1 gain-loss ratio and calculated my target limit at $39.05 [ (($37.01 – $35.99) x 2) + $37.01) ].

At 7:00 AM PT the stock made a strong break above $37.00, filling my order. I quickly went to my open position and added my stop loss and limit levels with an OCO (Order Cancels Order) condition.

CHK continued the upward move with little hindrance, reaching my target at 7:07 AM PT and topping out at $40.69 by 7:09 AM PT.

NOTABLE DATA POINTS

Date: 04-24-2020

Day of week: Friday

Approximate market performance at open: Dow +0.77%, S&P 500 +0.67%, Nasdaq +0.48%

Company name: Chesapeake Energy Corporation

Symbol: CHK

Sector: Independent Oil and Gas

Recent news date: 04-23-2020

Recent news headline: Chesapeake Adopts Poison Pill After Shares Drop on Oil Rout

Approximate performance before buy signal: +27.43%

Approximate volume before buy signal: 1,471,358

Float: 8.86 million shares

Setup: VWAP bounce, stop and go

Buy signal time: 6:58 AM PT

Entry time: 7:00 AM PT

Maximum exit time: 7:09 AM PT

Entry wait time: 2 minutes

Exit wait time: 9 minutes

Order type: stop market buy

Entry price: $37.01

Stop loss price: $35.99

Maximum exit price: $40.68

Maximum gain-loss ratio: 3.6 to 1

Did I trade this setup? Yes