Trying something a little different today, you guys can let me know if you like this method of educating. I’m going to walk you through a potential play that could’ve been made on 2/16/2021, ticker: SCKT.
Steadily gained from AH into PM/top watch moving into the day/had news/low float (4.68M)/solid volume/opened around $10.3 (hasn’t seen those levels since 2008)/decent day chart leading up to the move. Had an initial run out of open then slowly fell under vwap, watched for the vwap break around 10:45, tested, failed once, retested (11:03), broke (over). (It’s important to know not to instantly jump in on a vwap break. You need it to hold/test. There are times that it will break and run, at that time other strategies are applied). As you can see in picture one, the green circle represents the vwap hold/tests after the initial break. Potential buys (longs) are made here with risk (SL) under vwap (red line/past support level). Watching Level 2/T&Ss is also key in this area. We get the clean run to $26.23 (picture 2), however we can see the RSI is showing bearish divergence (making lower highs as the chart makes higher highs). After hitting $26.23 we get our first pull back following the initial run. Some will take profits here, others may wait to see if it retests hod (high of day) and in this case it tries but ultimately fails (for now). Practically double tops and we get that long bearish candle on the minute chart. Most would take profits in this area (red circle) after failing to break hod. Even though SCKT ran to $35, solid profits were/could’ve been made on this play. This is a great example of a vwap play, many traders use vwap as an indicator and with that said, many use it to play off of. Let me know if you guys find this beneficial, if so I’ll do more like it.
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