The madness in AMTD Digital Inc. (NYSE: HKD) on Tuesday was one of the craziest moves I’ve seen in my trading career…
And if you came to the market yesterday, you might’ve felt like you missed the boat…
Most of the big runners from earlier in the week fell from their highs.
But that doesn’t mean the moves are over.
So today I’ll show you why there are still opportunities in recent runners. And how you can make the best trade plans…
Note: A storm took out my internet yesterday afternoon and I had to cancel my free webinar. It’s been rescheduled for Monday, August 8 at 3:30 p.m. Eastern. If you’re registered we’ll send you all the details. If you haven’t registered yet — sign up here.
The Trade Opportunities Aren’t Over…
HKD was possibly the biggest short squeeze of all time.
And the massive move created sympathy plays in other stocks … AMTD IDEA Group (NASDAQ: AMTD) owns 55% of HKD stock, so naturally, it climbed higher…
But it also triggered squeezes in other tickers too…
Like MMTec, Inc. (NASDAQ: MTC) on Tuesday, and Golden Sun Education Group Limited (NASDAQ: GSUN) yesterday.
They’re low float names with no news…
But shorts are getting spooked and buying to cover to avoid the same fate as HKD shorts.
But like I said yesterday, I don’t like random spikers…
I like stocks that can consolidate and hold their gains.
That’s why I think some of the best opportunities in some of these recent spikers can come today … Or even better — on Friday.
What to Look For Before you Trade
The reason I like multi-day runners over day one spikers is that they give you key levels to trade off.
That makes it easier to plan your trades. You can base your entries and exits on key support and resistance levels on the chart.
It’s basic technical analysis…
Check out this whiteboard example I made for SteadyTrade Team members…
You can see that AMTD topped out at $12 five times. That means it’s a key resistance area. And if it breaks above that level, that’s when shorts will panic.
That’s why my plan is to wait for that level to break for an entry.
Then I look for the next resistance level on the chart as a potential exit.
If there’s no resistance overhead, I like to use three-to-one risk to reward to determine my exit…
But price action is king, so if a stock loses momentum and volume, don’t be afraid to take profits.
And if a stock doesn’t break out — let it die.
SteadyTrade Team members can watch all five of my Chartology webinars here. If you’re not a member yet, apply today to get access to twice-daily webinars and more.
Another great resource to learn technical analysis is the book, “Technical Analysis Using Multiple Timeframes” by Brian Shannon. (As an Amazon Associate, we earn from qualifying purchases.)
It was a huge influence on me at the beginning of my career. And it helped me develop my trading style.
So when it comes to trading any of these hot runners — pick your favorite.
And if none of these stocks hold up or break out — there will always be another play…
Monkeypox stocks are still hanging around. Earnings season is creating big runners in large caps…
There’s no shortage of plays.
And when the market’s hot like it is now — that’s when you show up every day!
Have a great day and I’ll see you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade