Hey everyone, this is Robert Roy, founder of WealthBuildersHQ.com, and welcome to this edition of Trade With Rob, which is for Monday, May 3, 2021. Hope you all are having a fantastic day. Here we are over the weekend, just analyzing the markets a little bit, and we’ve got a candidate I’d like to share with you today, so let’s go ahead and jump right in.
Let’s first bring you over to the S&P 500. Let’s do a quick analysis of what’s going on there. So, we’ve bumped our head on ugly. What is ugly? It’s this 4181 level that is a major Fibonacci level. Most trade don’t even know it exists, but we’ve hit 7 or 8 days in the last 2 and a half weeks. Over and over and over again. Even on Friday, coming back to it again. So we’re overall still in a bullish bias, but we’re having problems with the 4191, 4200, and ultimately we ran up to the 4218.78, which is our all-time high, closed a little bit lower, which was still an all-time closing high on Thursday, and then gave it all back on Friday.
So with that, we want to look at our candidate today and say, “where are we at? What are we focused on?” and that candidate today is going to be American Express, so let’s take a look at AXP.
Let’s go ahead first as we always do and look at the Fibonacci as our very first thing. We’ve got a great V-bottom, moved up, sideways. Some of you have hear me talk about hiccups, right about in the middle of the overall run, that was a little hiccup in there, then we had a good, strong, overall move inside of that.
So, what is taking place now? We’ve got a zero-line breakout trade setting up. So, we broke HARD out of the zero-line on Wednesday. We broke above it, we gapped up, and we pulled back a little bit on Friday, gave some back.
So here’s what we’re looking for: a retest of the 151.46, and a bounce – it may come Monday, it may come Tuesday, but that’s the setup we’re looking for. We’re not trying to force a trade; we’re trying to find the right trade in the right place.
If we get the bounce off the 151.46, what are we looking for? Stop is 149, so set a hard stop in place. And, we are focused on 2 targets. Target 1 tasks us to 156.25, which is just shy of the Fibot, and target 2 is 161, which is just shy of the -.272 Fib line.
So, if you have more than one contract, the goal is to scale out of half of the trade at target 1. The second half of the trade at target 2. The way that I calculate Fibs, this gives us a 2 standard deviation move, which means that about 96% of all data points fall within that 2 standard deviation move. Can it go further? Sure, it can. Can it not make it to target 2? Absolutely.
If you hit target 1, you’re going to move your stop up to just above breakeven for the second half of the trade.
There you have it, ladies and gentlemen. You have a great rest of your day. Stay focused on the quest of becoming a great trader, keep crushing it, and remember that you’re just one trade away.