Thor Industries, Inc. Weekly Bullish Gartley Re-Entry - Exit

Guess we can blame it on the NFP Report this morning with a loss of 140K jobs vs the expectation of +60K new jobs. Whatever the cause, THO tanked and hit our Stop when the stock hit 95.36 at 14:50 ET. The sell price for the Feb 105 Call option was 3.10.

Since we formed a Bearish Engulfing pattern and closed below the 8ema, plus the ADX crossed Bearish and its a Friday. So, even if our Stop wasn't hit, I should have exited at the close today anyway.

I think I've had it with this stock. The option Bid/Ask spreads are terrible and without using options, the share price is just high enough that we'd need to tie up a lot of stock to get a standard 100 lot position. I've only been trading THO because of the great Bullish setup, but this annoying price action has whipsawed us in and out twice already. That's enough. There are many, many other things we can be trading.

So, summary:

Entry: 395

Exit: 310

Net: -$85.00 loss

Done with this trading vehicle.

Thor Industries, Inc. Weekly Bullish Gartley Re-Entry - Update 1

Today we gapped up and came very close to reaching the previous swing high before retracing by almost 50% by the close. We did the same thing yesterday and with more volume but less price range. It'll be important to see how we deal with the previous swing high level at 103.35 when we get there. Probably tomorrow. Although, tomorrow is Non-Farm Payroll Report at 8:30am ET, which can swing the market in any direction, so who knows.

Today's bottom wick did not fill the full gap. That's a sign of strength, at the moment. However, going forward there will be some unfinished business closing that gap, which I like to call "pressure" but its not really pressure. It would be nice to hit our target before reversing enough to finish closing the gap. If we fill the gap before hitting our target then we'll have to endure some heat. If we fill the gap and close under the 8ema, we may have to close out of the position.

I added the 2 thick, yellow, angled lines to show a short term AB/CD. We're going to need a CD length extension, like 1.272 or 1.618 the length of AB to avoid taking some heat very soon, probably tomorrow.

Notice we still have plenty of room in the Stochastics before becoming overbought.

The Feb 115 Call short hedge I explained yesterday high today was 2.30, so we're not yet close to the 4.00 target.

Bottom line is we're looking strongly bullish at the moment.

Thor Industries, Inc. Weekly Bullish Gartley Re-Entry

I concluded the 12/28/20 post in this thread with "We'll monitor the THO chart and look for an entry for a new long position." Found it today.

This morning before the market opened, I noticed THO had bounced off the 50sma and was peeking over the 8ema and 20sma. The bid/ask spread on the options are terrible, but its still a better alternative than a decent amount of the stock. I used the stock last time and it tied up a lot of equity. The world was crazy then (12/23/20) but its even more crazy now. So today I really preferred defined risk at a fraction of the stock value I'd have to put at risk.

The option market is closed pre-market so I had to wait but I knew I'd be busy at the open. However, since this stock moves fast across price ranges, I wanted to catch it before it got away from me. 

So here's what I did. I entered a conditional buy order for a Feb 105 Call. The condition was that the stock price was between 97.50 and 98. The thinking is if it hits 97.50 then its going higher. Of course, that's not necessarily true, and the 97.50 figure was by eye, so its a bit risky. I specified the upper limit of 98 in case it gapped up on the open, or option trading was delayed while the stock rocketed upward.

If you look at today's chart you can see the Open and the Low of the day were equal (95.41). This is another bullish indication. At 9:52am ET the order triggered and we got a Call for $3.95. When the order filled I added a Target at just below the 61.8% Fib extension of the green range at 113.64 and a Stop just below today's open at 95.36.

Interactive Brokers has an order type called a "Snap-Mid". This results in a limit order where the limit is the midpoint of the Bid/Ask spread. I used this for the Target and the Stop. I also added a backup Stop that would result in a market order a little lower at 94.36 in case the Stop-Limit doesn't fill. Of course, I used the same OCO (aka OCA) code that will close all the other orders when any of them fill.

Later in the day, I noticed we had a nice paper profit. This stock is so dynamic relative to price levels that achieving a risk free trade would be very, very desirable. So, what I did was enter a limit order to sell a Feb 115 Call at $4.00. Remember, we paid $3.95 for the 105 Call, so if we sell the 115 Call for $4.00 we'll have no risk! The downside is our profit will be limited to a fraction of the 115-105=$10 spread. A $10 equity in an equity option is worth $10 x 100 shares = $1,000. If this hedge order triggers we'll be in a 105/115 Bullish Call Vertical Spread at zero cost. Not a bad thing.

Here's the bullish indications I saw that got us in:

• Retest, Bounce off 50sma
• Left/Right Combo
• Slow round curve
• Close over 8ema
• Above all MA's
• ADX Cross

Summary (Feb 105 Call):

Entry 3.95

Stop when Stock = 95.36

Target when stock = 113.64

Pending hedge order to sell Feb 115 Call at $4.00

Thor Industries, Inc. Weekly Bullish Gartley - Exit

The top chart is the Daily, the bottom chart is the Weekly.

Today we opened with a gap up. Looks like profit taking got a little carried away. The Daily created a Bearish Engulfing pattern on high Stochastics and closed under the 8ema. It also hit my stop at 98.38 and exited with a little slippage at 98.28.

The Bearish Engulfing pattern on the Daily followed a double Doji and a Negative Stochastics Diversion. We're also about to enter a new phase going into January. This chart from 2008 - 2018 doesn't add any confidence:

Jan 2019 was an up month and Jan 2020 was a down month to complete the picture but the S&P 500 is currently very overbought.

Now, on the Weekly, THO is not yet overbought nor has it closed below the 8ema. So the Bullish indications that got us into this trade have not yet been violated. If we were trading on the Weekly chart we should still be in the trade. However, we would have needed a much lower Stop and therefore a much smaller position in order to control the risk. And the setup looked so good, I didn't want to go in that light. Options would have been a good solution but the options on THO are terrible in terms of liquidity and Bid/Ask spread.

So, the bottom line is that being stopped out of this trade, with the current price action, is better than holding on. I suspect this will bottom out on the Daily relatively quickly and start back up, unless the overall market starts to tank.

We'll monitor the THO chart and look for an entry for a new long position.

Summary:

Enter: 102.75

Exit: 98.38

98.38 - 102.75 = -4.37 * 50 shares = -$218.50 into the Loss column.

Thor Industries, Inc. Weekly Bullish Gartley

The top chart is the weekly. The bottom chart is the Daily.

I normally have been trading futures rather than stocks but last night on CNBC's "Fast Money", Guy Adami called out Thor Industries, Inc. (THO) as a bullish bet. I thought I saw an Inverted Head & Shoulders on their chart. So I took a look at it on mine and found a textbook bullish Gartley pattern on the Weekly.

Also found a Twentyman Line pattern and an AB=CD Pattern with a 38.2% Fib pull back. Both very bullish.

So I'm long from 102.75 but I'm very skittish about the equity markets, so I'm setting a nearby target. There are many targets available for this trade. I'm using the 27.2% Fib extension of the green range, which is 106.63, and is near the .618AD of the Gartley at 105.02. It's also near the Gartley C point at 107.59. The actual Sell Limit order is for 106.50.