Five Below

Here’s an interesting trade to start the week. FIVE ended the day down about 11%. It offered up a couple of highly profitable trades. I got the first one, missed the second (I’ll explain why in a minute). So I must have shorted it, right? Wrong. Here’s the chart:

The price opened way way down. A big gap like this is a sign that something interesting could happen, like the gap closing. It didn’t, but it didn’t have to. The price just trying to close the gap was provided enough range and volatility to give us ample opportunity to make some decent profits.

The first entry I left a little late because I was rather wary of that $100 price point. In the end it blasted through it, so that was the time to jump aboard and ride it until it faltered. Yes, I missed out on about a thousand dollars extra profit had I got out at the top, but that’s the thing about trading — you don’t know it’s the top until after the event.

As I said, there was a good second entry to be had a bit later. I missed it. I saw it setting up, but I was watching TSLA like a hawk after it had blasted through a rather important price point. There was even more money to be made on that, but I’m trying to avoid posting Tesla trades here now because I feel the price is getting to a point that a lot of people won’t consider it, even though dynamic sizing makes it accessible.

Anyway, back to Five Below. Despite missing the best exit, and missing the second entry, this nice simple trade netted $1,890 profit in about a quarter of an hour, so it wasn’t all bad.