NET: My Last Trade & the Next One: Patience & Renko
I just posted a note on the power of using Renko charts in preparing for a position - linked to this one.
NET (Cloudflare) is on my watchlist for new positions. Had a quick trade on NET around the earnings earlier this month - and i'm now watching the chart for the next trade. would like to share some details showing another example of the power of Renko charts
- entry @ $59 on the 8th - as marked on the chart
- exited @ $69.45 -- triggered by a 3% trailing stop on the gap down on 16th .. P&L% was 17.7% -- not bad for a 1 week position (my P&L% was a bit higher as i also sold a weekly covered call as an earnings play)
(Note: yellow vertical line shows where my entry would have been if I entered based on the chart signals - but i entered ahead of the earnings on strong fundamentals and expecting strong earnings.. the earning day's action confirmed the position was at little risk)
so now, i'm looking for my next entry to ride the next leg up - believing that NET is starting what might be a strong trend as the market recovers - and the most important tools to help me pinpoint my next entry are: patience and Renko. here's how:
- we can see 3 "FOMO Traps" in 3 consecutive days .. where NET opens with a gap (up or down) then runs up fast, only to close lower than open, trapping traders who thought that "this is it! the move up started .. let me in" - or those who have tight BUY STOP orders
- these FOMO Traps don't even show on the Renko - and the Renko chart clearly shows that we're still "not there yet"
- the MACD and the Strength Inspector on the Renko are both far from a positive setup. the MA's are still heading down .. clearly NET still needs to "build up" a bit more before the next leg up;
- The entry setup i'm waiting for has been specified - My Alerts are set .. and the "Fisherman patience" mode is on :) .. waiting for the next ride.
(As usual: This is not a trade recommendation !! but i hope it helps provide couple of good trade analysis nuggets :))
NET (Cloudflare) is on my watchlist for new positions. Had a quick trade on NET around the earnings earlier this month - and i'm now watching the chart for the next trade. would like to share some details showing another example of the power of Renko charts
- entry @ $59 on the 8th - as marked on the chart
- exited @ $69.45 -- triggered by a 3% trailing stop on the gap down on 16th .. P&L% was 17.7% -- not bad for a 1 week position (my P&L% was a bit higher as i also sold a weekly covered call as an earnings play)
(Note: yellow vertical line shows where my entry would have been if I entered based on the chart signals - but i entered ahead of the earnings on strong fundamentals and expecting strong earnings.. the earning day's action confirmed the position was at little risk)
so now, i'm looking for my next entry to ride the next leg up - believing that NET is starting what might be a strong trend as the market recovers - and the most important tools to help me pinpoint my next entry are: patience and Renko. here's how:
- we can see 3 "FOMO Traps" in 3 consecutive days .. where NET opens with a gap (up or down) then runs up fast, only to close lower than open, trapping traders who thought that "this is it! the move up started .. let me in" - or those who have tight BUY STOP orders
- these FOMO Traps don't even show on the Renko - and the Renko chart clearly shows that we're still "not there yet"
- the MACD and the Strength Inspector on the Renko are both far from a positive setup. the MA's are still heading down .. clearly NET still needs to "build up" a bit more before the next leg up;
- The entry setup i'm waiting for has been specified - My Alerts are set .. and the "Fisherman patience" mode is on :) .. waiting for the next ride.
(As usual: This is not a trade recommendation !! but i hope it helps provide couple of good trade analysis nuggets :))
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