Did you make that trade on Broadcom (AVGO) on Thursday? How about on Friday? Well, here’s the trade…which you can do again and again. (July 13, 2018)
AVGO CA AVGO
Broadcom ( NASDAQ: AVGO ). This is a stock that I featured on Thursday night because it was giving us a really, really solid reversal.
Now, the deal with this stock is, the company announced that they are buying CA ( NASDAQ: CA ) and that is why the stock went down so much; the same reason why CA ( NASDAQ: CA ) went up so much and it is still there because they are buying it for what they are buying it for, the price is just going to stay there.
My trade on Broadcom ( NASDAQ: AVGO ) was buying this, I think I bought it right around 2:01, not first thing in the morning. We had to wait until the stock kind of settled out, took it a little bit above 200.00, set a stop right down here around 197ish, something like that and then held it into the day. I was happy, I sold it somewhere in the afternoon; I did not hold it into the close, not at all; I was happy.
But then if you look and see how the stock traded today, I am doing this video on Friday, you could see where the stock gapped up first thing in the morning, sucked a bunch of folks in and then sold off all day long; big money losing trade.
Well, let’s break this down. I am actually talking about two profitable trades and two really good setups. The first one is one that I described the other night, on Thursday, where the stock gapped down. And then you wait for it to bottom, you can’t buy it right at the open, and then you ride this thing up and you sell it where you sell it, right?
The second is what you are doing during the last half hour of the day. During the last half hour of the day you are looking around, looking for stocks that MIGHT pop the next morning. And they give you a good risk/reward profile because you know what your risk is. Here, with Broadcom ( NASDAQ: AVGO ), you know what the stock did, you know why it did it. You knew that it was closing near the high of the day.
Here is your trade: You are buying the stock that nobody really wants to buy, right into the close. Your idea is not to sell it Friday afternoon. Your idea is that you are buying the stock close to the intraday high, right at the end of the day, AFTER a big reversal. That’s the deal here, this big snapback reversal and then the stock trades close to the intraday HIGH. You are buying it right there, bam! You are selling it right into the opening print, like right into the first 5 or 10 minutes of trading.
This is a trade that worked really, really well for me. I think some of our members did it too. I just want to point this out to you because you can do this trade again and again and again. This stuff happens a lot, not every day but you would be amazed at the number of times that you can find this type of trading action. And finding it at the end of the day doesn’t really help you. Buying right a the open didn’t really help you out but if you find it near the close and you look for stocks that are starting to look like this, you buy it the last part of the day, sell it first thing in the morning. Even though the stock tanked almost 4 percent you made money on the long side because your TIMING was really good.
Free Chart