This is the trading playbook where the
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Hello everyone and welcome to
the Sunday episode of the trading
playbook. I'm your host Lawton Ho here
with Verified Investing and we got an
episode for you today.
But before I go anywhere
and start this off, I need you to do
couple things for me. First of all, make
sure to like this video and subscribe to
the Verified Investing YouTube channel.
It allows me to continue to put out free
content just like this. And second off,
before I go any further, if you haven't
checked out yesterday's episode,
um
go ahead and check that out. I explain
in detail
gap fills, which is the uh technical
indicator we're using today to
potentially find some trades.
All right. With that being said, here
are this week's plays.
Let me go ahead and share my chart
and we'll go over a quick refresher
before I go into it. We're using gap
fills, right? So, on gaps, say gap here,
right? It has not been filled. It's a
green candle. The gap is on top. Green
gap is on top. Red gap is on the bottom.
Right? So, the closest
gap fill here right here on the S&P is
here.
There's an additional one here. Oh,
excuse me.
Right here and then one down here.
Oh, and of course, I forgot about this
one up here.
But
green gaps
look at the top. Red gaps look at the
bottom.
>> [cough]
>> So, let's into it. Here is plan A.
The first trade that we're talking about
is SanDisk. And what I want you to look
at before I go anywhere, pause the
video.
Do you see a gap on the chart?
Where is the gap that I'm considering,
"Hey, this is not only going to be a
significant gap.
Um
Is it a longer short?"
You got it.
Okay.
For me, the clear gap is right here at
1786
on SanDisk.
Now, why is this like such a great gap?
Well, taking a look at it, you're like,
"Oh, well, it's not off of earnings."
But, the gap down was about a 6% gap
down. And after this price,
the stock fell over 20%, almost 21%.
Now, taking a look at this, you're
looking at a recovery.
A recovery that would be a push up 26%
into a beautiful gap fill
from just last month. And we're not too
far away here on SanDisk, right? We're
only about 5% away. So, so
should price move up into there
this upcoming week,
this would be a great level to
potentially short for either a day trade
or a swing trade, right? Maybe a little
longer. Additionally, you have another
gap for additional resistance. So, let's
say you don't want to go there cuz it's
a little too aggressive. Or let's say
you enter there on a swing, you can
always consider adding up here, about 7%
higher at $1918.
A secondary gap there
on SanDisk. I anticipate this to hit
even though it is a shorter week. So,
just remember that, you know, volume
might be a little lower just like it's
been just because we don't um
we don't trade on Monday.
All right? With that being said, let's
move on to plan B.
Now, for me on plan B,
I'm taking a look right here at Marvell.
MRVL. So, same deal. I want you to take
a look at the chart and try to identify
well, which were the gaps and where
could Lawton potentially
be looking to enter this trade.
I'll give you a moment to pause it and
take a look.
Well, for me immediately,
remember we're looking at the bottom of
the red.
241.45, there will be a clear level of
resistance up there. Why is this gap
important? Why does it mean you fall?
Well, look right here at that little E,
stands for earnings. That would be a
reversal of its drop on earnings. A
reversal that led to a almost 17%
fall after the stock reported earnings
just um last week. Additionally, this
push up into this resistance would be a
move up
over 20%
from
its lows
favoring a pullback.
All right, so should this happen either
this upcoming week or the week
following, I definitely think that that
would be a huge level of resistance and
one of us, at least in the trading room,
will definitely be shorting this
potentially for a day trade. Now, the
interesting thing about this chart is
let's say it reverses and absolutely
collapses. Well, we can also use gaps to
the downside.
Should price come down to 194,
193.78, I anticipate support down there,
but it'd have to fall 12%. So, on this
one you're basically getting a two-fer,
two-for-one deal. You're getting both a
short level and a long level. And
finally, plan C,
SoundHound.
So, on this chart, let's do the same
thing. Where is the level? Where's the
gap?
Remember red,
we're looking for the bottom. And right
here at the bottom of this, look at that
from the 5th of August, basically a
month ago, earnings, where did the price
go? Price pushed up 27%.
And it since fell over 18%. Now, fall
down here into this gap fill would be a
move down 21 and 1/2 dollars.
A huge retrace. Should price come back
down into that level, I anticipate
support, I anticipate a bounce. That's
where I'd likely be a buyer.
One thing to notice,
unlike the other two companies,
SoundHound's a little cheaper of a
company, right? Only a
3 billion-dollar market cap. So, just
make sure that you guys are careful out
there when you're trading these kind of
riskier or smaller companies, all right?
With that being said, guys, my name
again is Lawton Ho here with Verified
Investing. Thank you guys so much for
for tuning in. Let me know what you want
me to cover, and I'll be sure to read
the comments and look to cover something
new next week. I hope you have a great
rest of your weekend, and I'll see you
guys next week. Bye, y'all.
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