Hi everyone, welcome back to the blog. I hope you had a nice week.
Markets ended slightly higher this week, with volatility relatively low. I suspect a somewhat larger 5-10% correction is coming, and am still holding my AAPL short as a result, which I’m down a bit on. I’m still holding WBA, but sold M slightly above my profit exit at 20.24 (profit exit was at 20).
Since the M trades have worked out extremely well when I trade exactly opposite to where I think it’ll go, I’ll continue to trade the stock this way and see what happens. Of course, I’ll still follow my trading plan and use proper risk management.
M daily chart below. I’ve circled the area where I was extremely bullish (circle on the right), and the 2 times I was extremely bearish (middle and left circle). It seems like I have a good “feeling” of when the stock will go up.
AAPL daily chart below. I’m currently down about 0.35% of my total account value on this trade, and will exit at the end of this week if I’m still down (stock above 147).
I’m looking at going long AMZN soon. AMZN would be a nice trade to go long on because it is highly correlated with AAPL, so these two trades would hedge each other (since I’m short AAPL).
AMZN daily chart below. It seems like this pullback has a good chance to be over if we compare it to the size of the previous 2 pullbacks. One way to trade it is to go long now or very soon with a wider stop loss (stop near 3100, and profit exit near 3700). Another way to trade it is to wait for a price rebound, then buy on the next small pullback and use a tighter stop loss below the most recent low.
Like always, I’ll keep you updated if I decide to take any new trades.
Please enjoy your week and stay safe.