Sometimes, when a stock makes a big enough move in a day, it can carry some of that momentum into the next trading session. And sometimes the next session will see a big move retrace instead. Either way, it can be worth keeping an eye on what moved well in the previous session. Monday provided two excellent examples of how these previous-day movers can make us money.
First up, here’s ZM, which gave us that nice little short to finish up last week.
The weekend break did nothing to alleviate its weakness, and it made a lovely textbook setup. I mean seriously, they don’t get much better than this.
The reward for such a classic setup was a five minute trade that netted $1,710 profit. The exit came quickly, with a powerful bounce and reversal of momentum.
Next, DOCU, another stock which made some moves on Friday and was therefore on the radar.
This was every bit as good as ZM, but in the opposite direction (a long trade – hurrah!) Again, a beautiful setup with several confirmation signals. The move when it came, was not quite as manic as ZM. It took a good ten minutes to reach an exit point. There was more to be had for anyone who holds longer than I do, but I like to get out at the first sign of trouble. Besides, I set my exit order to take me out with a nice round dollar-per-share, booking $1,000 profit because I’m petty and like round numbers.
Will these stocks perform again tomorrow? Who knows. Certainly I will keep them at the bottom of my watchlist and check in on them at least a couple of times. As long as a stock keeps giving up nice trades, it is a worthy candidate for our attention.