Offbeat Ideas and Commentary from the Depths of Gil's Trading Notes
DraftKings (DKNG) has performed well since I first discussed it using the VPA/U&R Chart View last week as it was nestled down along 100-day exponential moving average support. By Thursday, enthusiasm for the stock ratcheted up significantly with a buyable gap-up (BGU) move using the 36.44 intraday low of the BGU price range as a selling guide, per standard BGU Rules.
Is this approach that good, or just lucky? Well, I have always said that I prefer to be more lucky than good, and DKNG certainly proved that. On the other hand, as traders/investors, all we are ever doing is trying to work smart to put ourselves in the position to get lucky and that is all these off-the-wall set-ups using the VPA/U&R Chart View are trying to do.Another one flashing on my radar is ride-sharing/delivery outfit Lyft (LYFT), cousin to Uber (UBER) which has been sporting a constructive chart as of late - go check for yourself. LYFT the Laggard, meanwhile has lost most of the air that got under it back in late November into mid-December before topping and rolling over. As it comes down it starts to show some signs of rounding out potential base lows with four positive VPA signals showing up along these lows. At the same time, if you check a weekly chart (you can do this yourself) you will see that it is also pulling into a big price structure that extends back to July of last year.
The clues are here, but certainly clues are never any guarantee of success. We also need a concrete entry trigger here and what I see is a VDU test of the 100-dema and the 200-dema on Wednesday that held up as the stock flashed a positive VPA signal. So I consider a long position here using the 100-dema at 12.15 or the 200-dema as 12.13
Okay, you can admit it. If you played any of the hot moves in crypto-stocks as Bitcoin $BTCUSD once again caught the crowd's imagination from late October into late December, or if you just watched them go higher and wished you owned them back then, these recent sharp and very ugly pullbacks might have your attention. But nobody wants to buy a falling knife, no? Of course not, which is why you wait for the knife to hit the ground and stick with a healthy "toingoingoinnnng" sound effect. Then, and only then, can you grab it. Certainly, if we're going to use simplistic bromides like "never catch a falling knife" as words to live by, we can come up with counter-bromides based on a logical outcome of the first bromide using the same type of impeccable, irrefutable logic of language.The beauty here is that from a VPA/U&R Chart View perspective we have a clear moving average U&R at the 100-day exponential moving average, currently at 15.50 following a 16.13 close on Friday. That is where the knife may have stuck in the ground - it does have that look on the chart, you must admit. Maybe it hangs here for a day or two, allowing for a closer entry to the 100-dema, and then makes a move. Also keep an eye on Bitcoin which is looking quite ugly in an LSFB set-up in progress, as discussed in the weekend Focus List Review. If it can somehow regain its feet, then this set-up in MARA may have a better chance at working.
Maybe app-based broker/trading platform Robinhood Markets (HOOD) would also show some spunk. Not unlike MARA, it is posting a moving average U&R at the 100-dema as well as the 200-dema. This again becomes a simple, concrete set-up where a long entry is taken using the 100-dma at 10.63 or the 200-dema at 10.48 as selling guides. HOOD closed Friday at 10.71, so is certainly within buying range ofe both moving averages. Like I say, if I can put myself in a position to get lucky, using some reasonable technical signals that are outside of the boundaries of the more orthodox stuff the crowd is looking at, while keeping risk to a minimum if the trade fails, I'll take it.
Alright, if all these off-the-wall, crowd-shunning ideas are making your eyes roll into the back of your head, then perhaps McDonald's (MCD) can bring you back to a more orthodox state of mind. This doesn't get any more orthodox as MCD posts a strong-volume base breakout that also qualifies as a buyable gap-up (BGU) in my view. Standard BGU Rules say volume must be 150% or more of average, so 50% above average, and here MCD posted volume that was 47.09% above average. Given MCD's mega-cap status, in my view that is a heck of a lot of volume for a stock that size and that widely owned, so I'll consider the 2.91% shortfall as statistically meaningless. Boom, there you go, a BGU long entry using Friday's BGU 296.52 intraday low, less than 2% below the 300.53 close, as a selling guide.