This is what a hot market does, it offers very clear big R/R situations range and liquidity.
You'll see the initial push down, with a corrective wave up to the 61fib. From there we built a clear level at 62.5 with a hidden seller.
This small downtrend was within a bigger uptrend, this I started long small for a breakout higher, but very attentive and looking to take the other side should we trap longs.
That is exactly what happened. I switched short, covered into support and added back pyramiding.
Important to note today was the news.
Board members looking to 'squeeze' via listing on Nasdaq is bearish to me... All while the CEO is selling as much as he can.
This reminded me of the 2018 $TSLA 420 funding secure news, which itself put a top in after the initial reaction.
Kept it simple today. Semis short.
Let's go through the choices:
$ARM
-Fresh breakout
-3 day acceptance low 160s
-ATR candle
-No gap
->🚫
$SMCI
-Fresh breakout
-AIx news
-3rd green day
-No ATR candle
-Gap
-Long consolidation period (multimonth) and acceptance of 900s
->🚫
$AVGO
-Gap fill 70$ lower
-Weakness vs group last trading day
-Clear breakdown area $1,790
-Run from 1450 to 1850 or 30% within 4 days
-Big rejection volume last sessione
->🚫✅
This one is a different setup as the most extended mean reversion. I saw this one as the laggard and as the one with the biggest need for more structure and gap fill.
I expected this one to drift off easier than the rest and give a beta trade to the sector.
$MU
- 11% extension straight green
- 3rd day green streak(3rd being today)
- Big exhaustion volume last session
- Clear resistance level as last session highs
-None ideal bearish pin bar candle last session
->✅
The only reason I wasn't on this one was my personal history with the ticker which made me avoid it. I was long MU as one of my biggest bets at 60 a few months ago and cut it on the Chinese ban news which ended up not being material through the AI boom.
$NVDA
- Full extension candle last session
- Whole number 140
- Big gap
- Price acceptance low 130s
- No multi green candle setup
- 3 Trillion market cap now
- Cramer comment ('so far so good on holding...'
- Most liquid
-Clear target (136.5 support and gap fill)
Post open comments:
-Massive 140 seller wall
-Clear breakdown levels:
->139.5->VWAP->Lod
-> Easiest to pyramid and manage
->✅
Overall I was not super interested in the trade, but wanted to participate given the gaps. Given we did not have multiple green days and option expiry or similar, I wanted to participate until panic showed up.
I expected the bounce to be big and for the move to be over post the rebalance and stopouts. This is not what a general sector blowoff looks like in my view.
We had multiple great earnings, news and breakouts on 1/2 of the semi names. These need to either show a true blowoff or a non-event like reaction to great news and it does not look like it.
On top it seems like fintwit was ready for this short as well which doesnt show much fomo for these long moves.
Now can this be the top? Sure, but it is very easy to get wrecked shorting a bubble or strong trend and given the grade of the setups, I did not want to find out.
Hope this helps.
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The entire sector was dumping right off the gates. I decided to enter both $NVDA and $AVGO quickly.
$AVGO was already on the way by such a margin that I decided to make it a beta position, with less size and with a stop on a 1800 reclaim (with a squeeze protection which is why I had a hard order just under).
The goal was to get the potential opportunity for a range breakdown or similar setup to add more size.
on $NVDA I wanted to stop on a 140 breakout and let it test and get a feel for the selling actually done.
I did not want to let it open up into mid 140s with full size.
I cut 1/2 on that breakout and as soon as we rejected the 140 level I had a clear resistance at todays highs to risk off of.
I added and added big on the 139.5 break once we had proven to reject the 140s multiple times and failed to push after an attempted reclaim.
Goal was to cover into support and so I did.
___
Big caps are very different than small caps. They can panic one second and proceed to grind all day right after.
Big caps need to be managed with great care and speed. The goal for me on these always is a clear support area and to stop out right after I see even a remote failed followthrough post test.
Side notes:
-The most successful big cap setups start working within 30min.
-V bottoms are very common on strong sectoral moves
-Clear hole numbers are your biggest friend
-Having the gift of multiple stops is the only way to truly get big (140, vwap, open, lod).
Completely out and not looking to restart. the entire extension has been worked off intraday and balance seems found.