Hey everyone, this is Robert Roy, founder of WealthBuildersHQ.com, and welcome to this edition of Trade With Rob, which is for Monday, March 8, 2021.
The markets are already closed up for Friday, so let’s go ahead and take a look at what the S&P did and see where we’re at. So, we had this nice pullback on Thursday. Friday we gapped up almost to the lows of Thursday, then we close up on the day. That close up on the day doesn’t help us yet.
What I mean by that is, we’re still not out of the woods yet from bearish territory. We still have these lower highs in here to contend with. That doesn’t mean there aren’t stocks moving in a bullish fashion at this point. There certainly are, with a 73-point move on the S&P on Friday – great move.
We just closed at a key level which was the 8 moving average (EMA), and you can see that our low came down to the 3724-ish level, another key level, and our high came up to the 3852, another key level. Fibonaccis work, folks. All of this to say, you need to be checking them out!
So what’s our candidate for today? It is ETSY. So let’s go ahead and jump in, and take a look at Etsy.
We are looking at a zero-line breakout trade in here. Now, let’s talk about the Fibonacci first. If we grab a drawing tool, we see that we have a great V-Bottom in here, a little sideways move, move up, and a strong pullback in there overall. Great little move there on the Fib – setting the Fibs up, themselves.
We got our very first breakout that happened at our Zero-line. You’ll see it broke, went straight up, and you see, we’ve got this line, the -0.136 line – puts us at 210.06. We went right to it.
The question is – and we see it happen all the time – if we take a breakout trade, does it always work? Many times it does not; higher probability that it doesn’t. You’re always better off waiting for a retest.
So this one, you may have taken it, and you might have done okay. But, how important has this zero-line been? We came back and tested it again, and we bounced. We came back and tested it again, and we bounced. We came back again – and again (another bounce)…and now we’re here all over again.
Now if we bring it in again to get a little more zoom. Look what happened the last time we tested the zero line. We tested, we ran up, and where did we go? We wound up at that center line there – that 210 level, and we failed. We closed, and then the gap was massive. Hard to say “I’m taking that trade” unless you tried to catch it on the pullback…tough.
Now with that being said, we have a nice close near the confluence line. We have the 200 level, and the 198.50 which is our Zero line, which is our confluence, along with the 55 EMA, which is the brownish/reddish line.
If we get a move to the upside on Monday, the potential is 210, and that’s your target – $10. You may want to come off of it a little bit – 209, 208.50 – but just below that 210 level.
If your first target is triggered, you’re going to take off half of the trade. You’ll move your stop up to breakeven, and your second target would be that 221.62 as resistance – somewhere down below there, maybe 220, 220.25, around there. Your initial stop would be down here around 195.
So there you have it. Today’s candidate, Etsy.