The Chart Book: Profitable Week and July Setting up to be Volatile – Get Ready

Let’s start off with 2 trades that we took action on last week –  We closed a half position in Tilray for a solid 23% gain and also initiated a short in Nike (NKE), which going into last weekend was up ~3%.

A quick thought this week on a very important but often overlooked topic of position sizing:

Risk Management of your trading account – You should be risking anywhere between 1-3% of your PORTFOLIO size when trading.  Your portfolio includes your long-term investments, not just your trading account.  So size up your trading account according to your overall portfolio and keep your trades to within a 1-3% risk (i.e. how much will you lose on that trade based on your stop loss).  This will allow for your trading to have meaningful gains against your entire portfolio while mitigating downside risk.

Let’s get into managing our positions for the upcoming week. We don’t have a new trade set-up this week as we wait for some clarity in the overall markets and already have 3 pending positions on SQ, SPOT & NFLX that we covered last week.

Running total of our closed positions: (net % moves of the stock)

1. ROKU –  Gain of 35%
2. CRON –  Loss of 8%
3. TTWO – Gain of 15% (1/2 size @ 8% & 1/2 size @ 21%)
4. CVNA –  Gain of 11% (1/2 size @ 17% & 1/2 @ 5%)
5. ABBV –  Loss of 7%
6. AMZN – 
Gain of 4% (1/2 size @ 2% & 1/2 size at 6%)
7. CTXS – Loss of 3%
8. TLRY – Gain of 23% (1/2 @ 23%)


Open positions:

1. URA (Long from $11.60) –  Currently trading at $12.15, we are up ~5% on our position.  Let’s exit half the position at $12.50 (~8%) – keeping stops at $11.25 (~3% risk).

2. IP (Long from $44) – Currently at $43.32.  Keep stops at $40.70 (~7% risk).  The chart is looking fairly strong again, so we do expect an upside move to start gaining momentum in the next week or two.

3. BAC (Long from $28.40) – Trading $29.03- continue to hold.  We are finally profitable in this trade and looking for a continued move higher in Financials. Will re-evaluate the position if prices fall below $26.

4. TLRY (Long from $39) – Trading at $46.65 – Closed half position at $48 (23% gain).  We are going to move our stops down to $40 to allow for some more breathing room.  Final take profit levels are open right now as we wait and see how price action unfolds.

5. TWTR (Long from $36.29) –  Trading at $34.88 – Prices have moved against us into an important support level.  If we don’t start to get a bounce soon, we will need to adjust the wave count.  Nonetheless, keeping our stops at $33.50 (7% risk).  Exit half position at $43 should price move in our favor.

6. NKE (Short from $86.20) –  Most short positions should have been established at over $86 when the market opened last Monday.  We got in at $86.20.  Our shorts have worked well so far and we adjusted our stops to breakeven (as noted in the trade idea last week) when prices fell below $83.  We will gladly keep our stops at breakeven while looking to exit half the position at $79.80 (~8% profit).

New ideas/pending orders for this week – Square (SQ), Spotify (SPOT), Netflix (NFLX)

SQ Looking to get long at $68.15. Stops at $59.50, with $79 as our first take profit level.

SPOT Looking to buy @ $137 with stops at $119.50. First profit level at $167.

NFLX Buying a HALF position at $322 – stops and profit levels open for now.

(Refer to the previous blog posts on our website for the charts of these 3 stocks)

If you’d like to see the previous Weekly Chart Book Updates, they can be found here: https://www.aspentrading.com/chart-books/ 

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