Hey everyone, this is Robert Roy, founder of WealthBuildersHQ.com here, and welcome to this edition of Trade With Rob, which is for May 13, 2021. Now, the markets are closed; let’s go take a look at the S&P 500 and see how it did today.
Oh no! Another blood-letting! 89 points! I can’t remember the last time we’ve had that – where does that take us back – probably about here from high to low – but we certainly didn’t gain or lose 89 on either one of those days. What an amazing move on the S&P today. Definitely to the bearish side. Looking a little bit oo-ga-ly (that’s Brooklynese for “ugly”), not looking good at all.
So let’s go take a look at our candidate for today, which is Unity Software (U). Let’s go take a look.
So here is my V-top right in here, nice follow-through, good, strong V-bottom. Went through the 0.236, that’s always 3-check-marks. Wonderful. That usually means it’s a good Fib setup, and we came down yesterday (earnings day), gapped down, and pulled up. Today, we gapped up and failed on the day. So what does that mean for us?
What are we looking for? If we can break through that 86 level (which we did today) – because that head-fake, that big move yesterday and back up again today – we got a fail. We got a failure below the 86.
What do I want tomorrow? Small move to the downside would be okay; my preference would be a retest of the 86 level. If I can retest the 86, good to go. Look for the failure, for the rollover to the downside.
We’ve got our first target at 75.75, and our second target at 65. Both good setups.
So what do we do at target 1? We sell half the position at target 1. Our initial stop is at 90.50. If our first target is hit, we’re going to move our stop to where we’re at least break-even, possibly continuing to move it down even further after that, but we want to make sure we’re not giving anything back out of our own pockets on the second half of the trade.
If it continues through the 2nd standard deviation, makes it down to $65, and you got in at $85 – $85 down to $75, that’s a $10 move; $75 down to $65, that’s another $10 move…WOO! Man, we are rockin’ on that one, baby, if we can get the continuation through it.