Two themes this week for the names traded: Gap Fills and Simple Moving Averages (SMA). We called out the gap fill for AMD from the start and the candles followed through with the fill and reversal. We saw XOM do the same thing. TSLA and DKNG closed the week dancing between the 150-day and 50-day SMAs so we'll take a look at those, all part of this week's recap!
Ok now let's get to it, starting with AMD. I noted the bears were looking for a close below $85 to get excited about more downside and Wednesday gave us the opportunity to take entry.
As the day came to a close Wednesday the opportunity to take puts with a close below $85 was there, congrats to those that got in! The candles for AMD gapped down Thursday and continued down to the next level 79.30 only to quickly bounce and close right at the open. Another reminder to take profits when nearing trading levels BEFORE someone else beats you to it.
Friday started by quickly filling the gap and then sold off with the rest of the market again getting down near the 79.30 level allowing for nice profits to be taken for those that got in the puts. Semiconductors overall look weak and could be what leads the overall market to the downside. I think its worth watching these companies closely.
Next on the gap fill front is XOM. Monday started strong filling a gap from June and pushing past the critical 100.46 level. HOWEVER, the key is to get a strong close above key trading levels to take entry as I noted in this week's notes and we did NOT get that close above.
Instead, the bears pushed the closing price lower and followed through with more selling down to the next level of support 95.35. I was looking for a push higher in the energy sector this week but never got the set up so there was no bull entry taken. Maybe I was a week early, I'm not sure. What I do know is, sticking to the plan is how you make consistent profits and minimize losses.
Here's a look at the chart for XOM. A positive note for the bulls was today's close above 95.35 despite the second half of the day sell off.
The candles for TSLA look like they want to go lower but as I noted, the 50-day SMA provided support today but only after the big drop post rejection at the key level of 286.67.
Monday gave an initial attempt to close above this level but failed. Tuesday opened above but proceeded to sell off and close all the way down near our next level of support at 276.37 and should have got your attention with respect to taking a short position. Note the close below this level on Wednesday was another entry point, opening the doors for more selling Thursday and Friday.
Friday opened at the 150-day SMA and sold off closing at the 50-day SMA which I thought looked kind of funny until I saw the exact same thing with DKNG (more on that next). If this support breaks there is another 10 points to drop before the next support level as well as a gap to fill another 10 points below that near 250. The start of next week could be very telling.
Last up is DKNG which was easy money for the bears this week if they paid attention to the crucial 16.50 level being tough resistance. Similar to TSLA, DKNG tried to get a close above its key level but could only close right on 16.50. This got my attention and should have gotten yours too. The close Tuesday below 16.50 gave time for entry before the end of the session and this was the best entry to take from a risk management perspective.
Congrats if you got in with puts as the selling continued Wednesday and Thursday all the way down to the 50-day SMA and bounced. Friday had the open on the 150-day SMA and close near the 50-day SMA after a small bounce, as mentioned, and Monday could provide a nice set up depending on the information the chart provides. That 50-day SMA support is what I'll be specifically watching.
Next week we'll be trading TSLA and DKNG again because of the potential for great setups on Tuesday's action. I'll also have trading levels and thesis for LCID and NIO, both have really interesting set ups and the latter reports. Posting later today.