TSLA Daily Bullish Gartley

This has to be quick. I might say more later. Simply, Tesla is forming a Bullish Gartley pattern while also forming a Bullish Engulfing candlestick pattern. Assuming the D point of 666.14 doesn't change, here are the targets:

.5AD=723.47

.618AD=736.99

.786AD=756.25

1.618XA=898.07

We're going for the 736.99 target. We got a TSLA May 7th 720/725 Call spread for $2.00, and a TSLA May 7th 730/735 Call spread for $1.68.

This seems like a high risk trade because the overall market looks like it's on its way down. But the Gartley pattern is perfect except for 1 thing. The D point needs to be 664.78 or lower to satisfy the AB=CD rule. So we're short by 666.14 - 664.78 = 1.36. Close enough in my book, but it makes me suspicious price might come back down to satisfy AB=CD. Although I don't think that will be the case.

Picked the May 7th expiration because the target should be easily made in a week, and the high Theta will assist to widen out the spread quickly.

Risk: 2.00 + 1.68 = 3.68 * 100 shares = $368

Reward: (5.00 - 2.00) + (5.00 - 1.68) = 6.32 * 100 shares = $632

R:R 632/368 = 1.7:1 not bad.

It's almost 2 hours to the Close, so things could change. But I suspect the Gartley will still be valid at the Close.

CRWD Bullish Daily Chart - Exit

 Truth is, I got spooked. Market is and has been very overbought for a long time. Feels like any little excuse could cause a significant pull back. 

Astro traders are talking about the "Pink Super Moon" and Mercury at perihelion yesterday and today. These events can be seen on historical charts having a track record of causing significant reversals. I've seen the charts but don't have copies to post here. The data is easily available if you want to Google it.

We're about to go into the month of May, when many traders may adhere to the "Sell in May and go away" mantra.

The ES, YM, NQ, and RTY equity index futures are all going sideways on the Daily charts, with volume waning over the past few trading days.

Lots of Quarterly Earnings coming out this week, including some of the biggest market influencers.

Federal Reserve FOMC decision tomorrow 14:00pm ET. 

And specifically to CRWD, we have a Dark Cloud candlestick formation. See the bottom chart above. Yesterday's high was 225.10. Today's open was 225.48, which is above yesterday's high. And today's close was below the halfway point in yesterday's candle body. That's the definition of a Dark Cloud, which is suggestive of more downside. And this was formed with high Stochastics. However, normally one should not exit from a candle formation until you have a close below the 8ema. So I know I got out early. But, like I said, I got spooked, given all the other things going on.

Given all the above factors, and that there was still a little profit to capture, I took a preemptive measure and sold not only this position, but several others as well. If it becomes evident in the near future this was an unjustified exit, we can get back in.

Summary:

CRWD May 220/230 Call Spread

Entry:  $4.39 4/22/21

Exit: $4.75 4/27/21

Net: +$36.00

CRWD Bullish Daily Chart - Update 1

All of the original Bullish indications I listed in the previous post in this thread are still intact. And today's candle was just a low volume doji, but it still had a higher high and a higher low than yesterday's candle.

So the decision whether to hold the position over the weekend was a no-brainer.

Options Max Pain

Some traders believe in "Options Max Pain". This is where deep pocketed options market makers, the ones who sell most of the options, will spend millions to buy or sell stocks on expiration Friday, and maybe during the few days leading up to expiration Friday, such that they will make the most profits by having the majority of options expire worthless. If they sold the options, and the options expire worthless, then the market makers keep all the premium they collected on those expired options.

I don't know if this is true, but I certainly have seen where my projections for price based on technical analysis seem to hold off on monthly option expiration day, then go towards my target the following Monday.

Here's an example using Draftkings (DKNG) on Interactive Brokers Traders Workstation platform today 4/23/21. The top image is a 1 minute chart. The bottom image is the option chain today at 3:45pm ET, 15 minutes before the market close.

Notice the bulk of the Call Open Interest, circled in red on the left, is above 55, and you could make an argument that a high percentage is from 57 and higher. Notice circled on the right most of the Put Open Interest is from 58 on down.

Now take a look at the chart. Notice how price oscillates around 58 all day and closes at 58.12. Hmmm, isn't that right between the bulk of the Put and Call contracts? Wouldn't that make the most money for the options writers? And the corollary would be the maximum pain for the option buyers.

Coincidence? 

CRWD Bullish Daily Chart

Found this on Tradingview.com stock screener (>500k volume/day, >$20/share, Sorted by ATR).

Here are the Bullish indications I see:

• Double Bottom off 61.8% Fibonacci retracement
• Trendline Breakout
• 50sma Breakout and Retest
• Close above all Moving Averages
• Bullish Harami Candlestick pattern
• Gap up
• Scoop pattern

So, I got a Crowdstrike May 220/230 Call Spread for $4.39. Of course, this is $10 wide spread, so the potential profit is $10 - 4.39 = $5.61 * 100 shares = $561. This is better than a 1:1 Risk:Reward.

Soon as the order was filled I entered a Limit Sell order for $9.95. No reason to wait. I always enter my Take Profit order and Stop orders immediately. Why not? Sometimes I don't enter a Stop order when I have a fixed maximum possible loss when using options.

My price target based on this very Bullish setup is to reach at least the 27.2% Fibonacci extension at 287.32 and potentially the 61.8% extension at 333.31. Even the lower target is well above the 230 top of the Call spread. I expect there to some trade management going forward to take advantage of a strong upward move, but anything can happen, so let's ease into it and see if the potential converts to paper gains.

May Corn Bullish Report Reenter - Exit

Target hit, and then some. 

Summary:

YC Mini Contract

Entered  602 3/8

Exit 619

619 - 602 3/8 = 16.625 * $10/pt = $166.25

If I used the full ZC contract, as I've done in the past, the result would be:

619 - 602 3/8 = 16.625 * $50/pt = $831.25

The most important thing is not the size of the trade, its the technique. Once you have a methodology pegged down and you exercise the discipline to stick to it, its relatively easy to scale up. The hard part is converging on a good methodology. Then the harder part is getting your psychology under control. The final part is scaling up. 

Scaling up is not technically difficult, but the added fear from a bigger potential loss tugs at you to raise your Stops too close and exit too early.

May Corn Bullish Report Reenter - Update 2

Our Buy Stop of 602, as introduced in the previous post, was hit today. We were filled at 602 3/8.

We had a nice Bullish move and closed near the high, which is also Bullish. We raised our Stop from 575 to 592, which is just under today's low at 592 3/4. If we go below today's low before hitting the 61.8% Fib Extension, after the move we had today, which was not excessive, then something's wrong.

Holding the Target at 619. The candle we need to hit our target tomorrow, from today's close, is shorter than today's candle. So, we are in a good position for this trade to hit its target, Trading Gods willing.