Chartsquare

Playbook Trade Changing Fundamentals

Tue, 06 May 2025 22:00:00 +0200

Variables

Relative Volume: >= 3
Gap: >= 3%
Average True Range: >= 1.0
Average Volume: >= 1M
News catalyst that is unusual and unexpected.
Significant changing fundamentals: margin, full year guidance, goverment investigation, core of the business is improving, new product.
Below long term technical key level.
Holding above VWAP or the opening range.
Battle develops on the level 2 or key levels matching thesis.
Tight spread displayed premarket and on open.
Stock correlates with the overall market performance: QQQ, SPY or RSP
Stock correlates with the sector performance.

Long Strategy

Stop Loss is below the low of the consolidation.
Hold long for a real move, Trade2Hold.
Add on shallow pullbacks with low volume.
Add when holding above a key level.
Cover into significant resistance levels from the daily.
Look for an over extented move to the upside on high volume to signal exhaustion and a place to take final covers.

Big Picture

Trump said he would announce pharma tariffs over the next two weeks. U.S. stocks rose after the opening when it was announced that Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer would meet with China’s top economic official later this week.

Intraday Fundamentals

Hims shares are up more than 260% over the past 12 months. The company sells mostly generic and compounded medicines online, pairing cheap, older drugs for cash payers with intensive marketing campaigns. Its business has been transformed over the past year by its entry into the weight loss market. Early in 2024, it started offering a legal knockoff version of Novo Nordisk’s Wegovy manufactured by a compounding pharmacy. Hims sold the medicine, called compounded semaglutide, for a fraction of the list price of Novo’s version.

Hims & Hers announced a long-term collaboration with Novo Nordisk to make obesity care and treatments more accessible, affordable and connected for Americans.
Telehealth company Hims & Hers reported first-quarter results that beat Wall Street estimates. But parts of the company’s forecast came in below estimates, and looming worries about the company’s growth as the era of cheap, legal knockoff weight loss drugs comes to an end.
In the quarter under review, Online Revenues of $576.4 million reflected a surge of 115.3% year over year on a reported basis.
During the reported quarter, subscribers were 2.4 million up 38.4% year over year. This was primarily driven by increased traffic to Hims & Hers’ platform (through websites and mobile applications), resulting from marketing activities and improved onsite and customer onboarding experiences.
Monthly online revenue per average subscriber increased 52.7% year over year to $84 in the first quarter.
The stock was down as much as 7.5% in premarket trading, but rebounded as the market opened. Shares are up 7.8% to $45.14 in morning trading.
RVOL: 11.67
ATR: 4.14
Avg Volume: 30.58M
Institutional Ownership: 71.38%
Short Float: 33.08%
Day Range: 48.50 - 38.21 = 10.29
VIX: 24.22

Technical Analysis

Trade Management

Expected Value

EV = (Reward * Win Probabilty) - (Risk * Loss Probability)
EV = (7 * 0.65) - (1 * 0.35)
EV = 4.2 (A+ Trade)

Recording

Trade Review

Entered too early, the EMA9 did not cross the VWAP yet. Used the order type limit instead of stop limit, which executed immediatly at a better price.
Missed to adjust the share amount from 200 to 140 after hitting the first sell limit order. Later when stopped out in profit I was short 60 shares. That is not acceptable and needs my full attention.
This trade should be a Trade2Hold, but instead of keeping a core postion and let it develop, I exited the whole position.
A rare opportunity, changing fundamentals with a great fashionably late setup. Many checks in favor, high probability and great risk reward ratio. An A+ trade, should have risked much more. During the day there were many opporunities to reenter.
Learned that the Fashionably Late setup works great with Changing Fundamentals. And that a fresh news catalyst increases the success rate a lot for all setups. In many cases the stock will be in play.

Playbook Trade Fashionably Late

Mon, 05 May 2025 23:09:00 +0200

Variables

Relative Volume: >= 3
Average True Range: >= 1.0
Average Volume: >= 1M
Below long term technical key level.
The 9-EMA is below the VWAP and builds an unique type of divergence on upslope followed by convergence on downslope.
Less volume when the price moves away from VWAP than when the price is moving back towards VWAP.
Convergence occurs in less time than the time of divergence.
Once the price clears the 9-EMA, it holds below and is riding the 9-EMA.

Short Strategy

Enter if the downsloping 9-EMA crosses the VWAP.
Stop Loss is 1/3 of the distance from VWAP to the high.
Cover into significant key levels from the daily.
Look for an over extented move to the downside on high volume to signal exhaustion and a place to take final covers.

Big Picture

US stock index futures fell after President Donald Trump reignited concerns about the effects of a global trade war by introducing new tariffs, while markets awaited the Federal Reserve’s monetary policy decision this week.
On Sunday, Trump announced a 100% tariff on movies produced outside the US but offered little clarity on how the levies would be implemented.
The S&P 500 fell 31.4 points, or 0.55%, at the open to 5,655 while the Nasdaq Composite dropped 160.7 points or 0.89% to 17,817 at the opening bell.
Technology stocks fell premarket as XLK was down 2.1% and the Semiconductor ETF XSD was 2.4% lower.

Intraday Fundamentals

On April 14 2025 Webull disclosed that it completed a reverse merger with SK Growth Opportunities (SKGR), making it a listed company on Nasdaq. Webull shares jumped 383% as intraday trading volume catapulted to over 29 million from a daily average of about 169,000. In the meantime the stock was continually traded back down to the previous levels.

RVOL: 14.34
ATR: 5.57
Avg Volume: 2.19M
Institutional Ownership: 2.25%
Short Float: 0.29%
Day Range: 17.39 - 14.42 = 2.97
VIX: 23.96

Technical Analysis

Trade Management

Expected Value

EV = (Reward * Win Probabilty) - (Risk * Loss Probability)
EV = (6.625 * 0.65) - (1 * 0.35)
EV = 3.95 (A+ Trade)

Recording

Trade Review

This trade signal appeared on the scalp scanner.
Many checks were in my favor: Market down, consolidating below VWAP, strong overall down trend, high RVOL.
It was a high probability trade with best risk reward ration of 1:6, an A+ trade. But the bid ask spread was not tight, was widening up to 20ct and I was not sure about the liquidity. Risked 30% instead of 60% of the daily risk.
I was calm and managed the trade well. Was taking profit at supports and moved the stop loss down to lower highs.
At 11:12 midday BULL stopped trading higher into the VWAP. I got interested as the stock was holding below VWAP and resistance area. But the volume was low, the tape did not move and it was midday, which was not a good edge.

Playbook Trade Changing Fundamentals

Tue, 01 Apr 2025 22:05:55 +0200

Variables

Relative Volume: >= 3
Gap: >= 3%
Average True Range: >= 1.0
Average Volume: >= 1M
News catalyst that is unusual and unexpected.
Significant changing fundamentals: margin, full year guidance, goverment investigation, core of the business is improving, new product.
Below long term technical key level.
Holding below VWAP or the opening range.
Battle develops on the level 2 or key levels matching thesis.
Tight spread displayed premarket and on open.
Stock correlates with the overall market performance: QQQ, SPY or RSP
Stock correlates with the sector performance.

Short Strategy

Stop Loss is above the high of the consolidation.
Hold short for a real move, Trade2Hold.
Add on shallow pullbacks with low volume.
Add when holding under a key level.
Cover into significant support levels from the daily.
Look for an over extented move to the downside on high volume to signal exhaustion and a place to take final covers.

Big Picture

SPY was down 0.6% and QQQ retreated 0.5% in premarket activity as US President Donald Trump’s upcoming tariffs announcement looms over markets. Economists now expect the average U.S. tariff rate to climb to 15% this year from a prior estimate of 10%. Goldman has increased its 12-month recession probability to 35% from 20%.

Health care stocks were falling pre-bell, with the Health Care Sector XLV down 0.5% and the iShares Biotechnology IBB 1.6% lower. XLV dropped from 145.94 to 143.93, -1.32% at the Opening.

Intraday Fundamentals

Johnson & Johnson has spent years trying to fend off lawsuits related to its talc products. Its latest attempt just failed again. The company faces sweeping litigation from accusations that its baby powder and other talc-based items harmed consumers. It had tried to resolve the cases using a subsidiary company’s bankruptcy; this was the third attempt at such a resolution.

The stock fell 3.6% in premarket trading to $159.95.

RVOL: Premarket and Opening below 2 but increased rapidly over 3 within 20 minutes.
ATR: 3.90
Avg Volume: 10.15M
Institutional Ownership: 72.99%
Short Float: 0.87%
Day Range: 165.47 - 156.85 = 8.62
VIX: 22.06

Technical Analysis

Trade Management

Expected Value

EV = (Reward * Win Probabilty) - (Risk * Loss Probability)
EV = (4 * 0.60) - (1 * 0.40)
EV = 2.00 (B Trade)

Recording

Trade Review

JNJ was not on my FinViz filtered list before the opening. I learned from this trade, the RVOL of some stocks will increase very fast as soon the market opens.
The news were already published before the open. I will check hot news and look for stocks with significant fundamental changes before the market opens.
At 9:35 the stock traded with low volume into the VWAP and support level at 160, which is a missed opportunity.
Have observed holding the offer at 158.30 on the tape and it is also distinc on the chart. Felt a bit uncomfortable because the stock was holding 30 ticks below VWAP. Usually I want to set the stop above the VWAP. It was a reason for me, not to add size when it finally broke down.
The low of the day was my target. The stock broke down pretty fast and I had 50 shares left. Moved the stop loss above the low of the day and let the trade develop. Got stopped out, but the stock reversed down again and closed at 153.24. Missed a big move, but I followed my rules to exit and made one good trade.