Hey Market Pilots,
In this past trading cycle, I had two trades which behaved very similarly. Which is to say they did nothing until they suddenly did something. It is not often that I step into a position and have to wait for it to start working.
My style, thanks to the incredible timing properties of the Moxie Indicator, means that I get into a stock that is about to pop or has just begun a move. But when I got into Datadog (DDOG) and NIO they decided they wanted to chop around for quite some time before actually going. NIO rewarded my subscribers handsomely, but I biffed with DDOG. Here are the lessons we learned.
With DDOG, I was a little late to the party because I could have entered when price came into the Hourly 50 back on 9/29/20. As it turns out, there was a news event that popped price. There was a ton of volume and it made new highs so I figure it would keep going, eventually. Price was a little extended as it was off the Daily 8 EMA and Hourly 50 SMA, but I thought it was worth the wait.
Well, I got a little antsy and then price started to waterfall just past the Hourly 50. I didn’t want to give too much back and thought this is what I get for going into a name I knew was extended at the time. I didn’t trust my favorite setup, the Trampoline Move, and sure enough it worked out like a charm such that price popped and ran the day after I exited.
My first lesson was that I needed to stick to my rules and my favored Moxie Trampoline Move. Second, there really wasn’t any real reason to get out as price was still oscillating within the previous area (if it ain’t broke).
Fun Fact: A Trampoline move is when Price is below the 50 SMA but Moxie is over zero.
Meanwhile, I was also in NIO.
NIO had also popped up and I chose to get in thinking it would also move up, eventually. Well NIO took absolutely forever of flagging before news and an upgrade from JPM for a $40 price target came out today. I took the mistakes I made from DDOG and the resulting move and applied it to NIO.
With NIO, even though it wasn’t going anywhere, nothing was wrong with it and it wasn’t broken. So I didn’t fix it. I could also see that the previous high was being used as support and that was an important factor to me. I held and I held. Then, the big move came out overnight but fortunately my Moxie subscribers and I were already well-positioned.
Over and Out,
Your Profit Pilot.