WFAD #12
$FL & $PYPL
These trading ideas were generated by Dorofeev Mikhail, head of analytical department at DTI, Phd, associated professor finance and prices department in Plekhanov Russian University of Economics.
$FL
First idea is stock of Foot Locker Inc. (FL).
On the pic. 1 you can see the idea of buying the 5-th wave of ascending impulse after breakout of the falling wedge.
The result is shown on the pic. 2
Profit from this recommendation = appr. +17.83% in 33 days (+194.51% annually).
This idea is still valid. As you can see, the initial stop-loss was rather big. So, execution of the idea could be made in several steps by pyramiding the position. You can see, at least 2 additional signals to buy this stock on pic. 2. The nature of playing this trade is playing financial reports (earnings) publication. From technical point of view, ascending impulse gave the hint to a trader, that there was a strong buyer in the market.
The only thing, that trader should do, — is identifying the impulse correctly, find acceptable R/R entry point and join the next impulsive wave (EWA theory). It’s rather simple, isn’t it? :)
The lesson is =>
- It’s possible to play earnings publications only with the use of TA.
- You should search for the impulse before choosing the direction of the trade. Market moves in form of impulse and consolidates in form of correction. Use this knowledge! Use this formula = (impulse#1)+(correction)+(impulse#2). Your trade should be activated, when (impulse#2) starts.
$PYPL
The second idea is buying stocks of PayPal Holdings, Inc. (PYPL). This idea was based on buying breakout of possible bullish flag or price channel (see pic. 3).
Considering the fact, that the price of this stock is moving in trade range (on monthly chart), we used not only TA, but also checked out fundamentals of this company (see pic 4).
On the pic. 4 you can see, that this idea was valid from fundamental point of view: stock is not overvalued, has acceptable fin. ratios, excellent financial sustainability and enough range from current market price to fundamental (median consensus) target price. The only thing we need — is suitable entry point. We supposed, that breakout of price channel was the suitable opportunity. The result is shown on the pic. 5.
Channel was broken up, but unfortunately that was a false breakout.
Loss from this recommendation = appr. -1.91% in 2 days (-343.8% annually).
The lesson is =>
- Always use stop-loss.
- Mange your capital correctly = do not use 100% of the deposit for the only one trading idea.
These recommendations were announced in community of Analysts VISION launched by Hedge Fund DTI.
You can find it on our Slack, #technical-analysis.
DREAM TEAM INVESTMENTS (DTI)
ALGORITHMIC HEDGE FUND
Web site www.dtin.ru;www.dreamteam.investments (beta)
Legal Address: Plekhanov Russian University of Economics. 115054, Moscow, Zatsepa 43. Tel.: +7 (495) 003–49–32
hedge@dtin.ru
