Turning Topping and Bottoming Tails Into Real Setups

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Transcript

This is the Trading Playbook where the
charts do the talking and every session
makes you a better trader.
Hello everyone and welcome to the
Trading Playbook. I'm your host Lawton
Ho here with Verified Investing and
welcome to today's Sunday episode where
we talked yesterday about topping tails
and bottoming tails. But,
before I go any further, guys,
I would just ask you to please like,
comment, and subscribe. Let me know what
TA pattern you want me to cover next.
And if you haven't already seen
yesterday's episode, go check it out. I
explain everything you need to know
about what a bottoming tail and a
topping tail is so that you guys can
kind of make educated guesses
um
on not educated guesses, but just
analyze charts and find potential
bottoming and topping tails once
understanding all of that criteria.
With that being said, let's get into
this week's plays.
And we're going to actually, I know I
normally do three actionable trade
setups, but I'm going to do three plus
one. Right? So, three plus one.
So, let's start with plan A, shall we?
And that is STLA.
So, I said previously, if you remember,
that on these bottoming tails, you can
enter potentially on a retrace or just
as soon as they post. And last uh last
week
on Thursday, we had a beautiful
bottoming tail on STLA, Stellantis. I
100% absolutely loved this level. Um
this is a huge, huge, huge automobile
manufacturers that makes Jeep,
Ford, tons of of of other ones
um down over 56% from its recent highs
of basically the year and then from
all-time highs way way way down. You're
talking 80% down. Um
but on the stock put in a beautiful
bottoming tail. Now, the question is
where could you get in cuz it looks like
hey, this is already pushed back up.
Well, you can get back on a retrace to
the bottoming tail. A 50% retrace of
that entire bottoming tail would be
around 531,
but I'm going to do something and
actually pull a fib and pull a fib from
that bottoming tail to there.
And I'll look and a retrace to that the
786 would be around 500 uh $5.42.
These are two different levels that you
can consider entering along on
Stellantis if it were to come back this
coming week. Just because bottoming
tails and topping tails aren't so
common, but these are two levels that I
would definitely be interested in buying
some Stellantis if it were
to come back lower.
Next one I want to talk about is Siri
Sirius XM. Now,
this is a potential short cuz this is a
beautiful topping tail. And while Sirius
XM is pretty beaten up on the chart, if
you look from its lows in February, the
stock is up basically 60%. Right? And
it's retracing to the uh
to the the topping tail basically now.
Right? And this is a really really
awesome trade for two reasons. One
because you have that perfect retrace
around 3142
and if it ever closes above, guys, if it
ever closes above this topping tail,
3142,
it's fine. You can 100% stop out of the
trade, right? It is close, and you can
absolutely stop out of the trade if if
you if you like on a close above
negating that previous
topping tail.
So, this is something I'm going to be
watching heading into this week. Very,
very curious to see should Siri um hit
that and then pull back or what ends up
happening or end up negating that
potentially moving higher.
The next one I want to talk about is
Pepsi.
Now, Pepsico
had a beautiful
uh bottoming tail right here, right? And
you can see that it did not close below
this. So, this this bottoming tail is
100%
still valid. Um if we take a look at
Pepsico,
um since its highs in February, stock is
down 20% almost. So, favoring a
technical bounce if it comes back to
this 50% retrace. Again, I know it hit
it this week, but if it does it again
into next week, that 136.72
or even 100% retrace, right? Let's say
you have it a 100% retrace here.
100% retrace down to the basically under
135, you could consider an entry there.
Not only do I love this level because
the topping tail came at a great time on
earnings, our bottoming tail came on
from earnings,
but additionally, um
this stock pays a dividend, right? So,
that means that and it pays like
basically 1% dividend. So, over time, if
you were to hold this for a longer-term
play, looking for a larger move up, you
would over time collect money via
dividends.
So, that's definitely something to look
forward to.
Now, the third play I want to talk about
is KHC.
And KHC had a beautiful bottoming tail
there and this is on the weekly chart.
So this is a little bit of a longer-term
play. The 50% retrace would be down to
2164. But if we take a fib here,
then we can say that okay, the 786 is
somewhere around 2218.
Right? So if price got back down over
here,
I'll go ahead and delete this.
Change this to 2218.
In the next couple weeks or so, right?
This is going to be my bonus.
Uh this would be a potential level to
look to go long on KHC.
Now, I know some of these levels some
levels are closer than others, but
that's generally what you like to see
with bottoming tails and topping tails.
It's difficult to just boom right away
see an instant topping tail or bottoming
tail. Um on the weekly on the daily to
get in, but that doesn't mean there
aren't potential bottoming tails and
topping tails intraday. For every single
one of these stocks and all of these
methods that I am consistently talking
about and teaching about guys,
you can use them not only on a daily
basis, not on a swing basis, and even a
long-term basis, but also on an intraday
basis, whether it's a 10-minute chart
or the 1-minute chart, um you can always
use these TA um
lessons to sharpen up your skills on all
time frames. With that being said guys,
thank you guys so much for watching.
Again, as my name is Lawton Ho here with
Verified Investing. If you haven't yet,
please please please subscribe to this
channel, the Verified Investing YouTube
channel. Please uh like it, leave a
comment down below. Let me know, "Hey, I
want you to cover this next. I promise I
read through all the comments and I
really appreciate all the love that you
guys have all showed me on the trading
playbook, all right? I hope you guys
have a great rest of your weekend. I'll
see you guys tomorrow. Have a great day.
Take it easy. Bye, guys.
>> That's the trading playbook. If today's
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