A Practical Approach to Trading Equities | Building a Stock Portfolio | 5-12-26

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[00:00:53]Good afternoon everybody. Welcome back to the Schwab YouTube coaching channel.

[00:00:57]for our last topic of the day, building a stock portfolio. I'm your host, Kevin Horner. Thank you all for being here today. Uh we are going to kick off with a brief review of the major indices at the close today before diving into a look at our example portfolio and adding some attempting to add rather some new example trades to that portfolio as we move forward here. But uh do want to say hi this afternoon to Connie Hill in the chat. she's going to get to comments and questions that I'm unable to, but I'll keep an eye on what's happening there nonetheless as I do try to answer those questions for you on the fly where we can. So, with that, um, I will also remind you to make sure you're following us on X, Kevin her CS, Connie Hill CS. A great spot to find us when we're not hosting classes for you here on the channel. Uh, and of course, as always, make sure you're subscribed to the channel as well. Let's get to disclosures and then we will dive in. So please remember everything we cover here should be consideredformational and educational only. We do not make recommendations nor endorsements for any specific approach to trading here. What we will do is incorporate technical analysis as we review the indices in the market as we set the table to look for new example trade opportunities. But remember that technical analysis is one not predictive in nature and two often only just one of your decision-making pieces. We discourage you from making decisions exclusively and only off what you see in the way of technical analysis.

[00:02:27]And we will, as I said, uh kick things off with a brief market review. Just kind of reviewing the um the trend of things here today. Kind of a stronger bounce maybe than some of us would have expected given the way things started today. uh and then we'll move into the example portfolio, make some adjustments to our existing exit strategies there and uh kind of review what has occurred since last week. So, there's plenty to cover. We're going to try and be as speedy as we can on our review, but like I said, everybody, look at that green candle on the uh on the S&P today. It's a hammer. Uh and of course, what we're learning here is that we were very weak in the morning and yet bulls stepped in and we finished above our open today. So certainly far better than it felt say 5 hours ago when things were pretty rough.

[00:03:14]Uh the 20-day moving average continued to be pretty far off. It's down there at around 7200. So still a couple hundred points. The 10day moving average still not tested with intraday lows today. But I think the biggest takeaway here if yesterday was in fact our high day and so far it's been the high day of this rally. We closed above the low on that day. So, we did not get a close below the low of the high day, which would give bears much more confidence. And it seems as though we might have kept the bears at bay a little bit here with this candle today. Now, we'll see if that's truly valid as we head toward tomorrow.

[00:03:57]Uh but let's see how this looks on the NDX which is off just a little bit more uh at almost a little more than three/arters almost 1% here. We did close below the low of our high day uh but again had a nice rally filled essentially filled the gap we made here and then uh finished just slightly below our open here. Our open today 29067 and our close 29064 and change. So, pretty tight there. And then the Russell was under more pressure today. Did manage to hold the 10day uh here and did test horizontal support as I've drawn in basically the the two weeks of highs we kept running to and held back from. Then we busted through 2,800 while we've come back and tested them. So, the Russell's under pressure perhaps tied to the 10-year yield spike and yields climbing here, putting a little pressure on the broad um small caps, of course. So, not really a surprise. Much more significant for the Russell if the uh 10-year yield were to push through this 4.5 area up above. So, we're going to monitor that as we head toward trader talk tomorrow morning at market open uh for those of you who will be joining me then. So with that, let's spend some time taking a look at what has occurred for us since we last spoke on last Tuesday. Now last Tuesday, we had a couple of trades working. We'd actually been in a position in Target. Uh I'm going to put up my standard moving averages here. And then I'm going back to my monitor page and we're going to check out the account statement for the last seven days. And notice we did make a buy on the 6th. So, um, uh, last Wednesday morning, put ourselves into a position here. It just did not go our way. We got long at 12947 and got quickly stopped out at 11834.

[00:05:59]And I say quickly, quickly being yesterday. Uh, and yet it's not going to feel good on the chart. Here's the way it played out. I thought I had my trades noted in here. I did. Oh, orders are noted. So, here's the trades we got long on uh back here holding the 20-day moving average. We built our exit strategy working against that 20-day moving average and then uh of course we had this big candle yesterday that careened through the 50-day and we got stopped out. Cost of doing business.

[00:06:31]We'll go ahead and move on. not a big concern because in this participation of individual equities, yes, we would love to stick with our trades, but we recognize as long as we go forward with an approach that we can repeat frequently buying at areas of support, building in a proper exit strategy, we should be able to have uh profit or an approach that it leads us to a better return on a on a more consistent basis.

[00:06:58]It's not the number of profitable trades versus unprofitable trades that we make.

[00:07:03]It's about building the the cash position through holding positions as long as long as we possibly can. And then occasionally we are going to get stopped out. We're going to take losses.

[00:07:14]That is a big part of what we do. So, we're comfortable with it because it didn't exceed our tolerance for risk.

[00:07:21]And for those of you unfamiliar, let me just remind you about our tolerance for risk and what we do here in my scratch pad. We go forward with the idea that we are doing about a $100,000 portfolio, never to exceed more than $1,000 in risk on any one trade and further not to exceed a position size of $10,000.

[00:07:42]That's what we consider to be full position size. Uh and then we incorporate stop orders as part of our exit strategy here so that we can work to mitigate our potential losses. Again, we recognize taking losses part of the job here, part of the trading process.

[00:08:00]So, we're hopeful that we don't take too many, but they are going to occur from time to time. Okay, next up, we had a fast and all trade FAS. I'm going to go ahead and add a little bit of time here.

[00:08:12]I think we held fast somewhere in the neighborhood of 3 to 4 weeks.

[00:08:17]Well, looks like a little longer than that. So, let's me let me add some more time to this. There we go. All right.

[00:08:23]So, we bought fast at 4562. We ended up getting stopped out just yesterday at 4343, but we've been raising our exit strategy along the way. If we take a quick peek at fast here and the trades that we've placed. So, we got in back here uh as we were dancing on the 50-day moving average. We did not have an exit strategy for profit. We've only been trying to maintain this position for as long as possible. We built in an exit strategy that incorporated the average true range below our preferred moving average. And at the time, it was the 50-day. And we held it even through all of this nonsense here. But you can see just yesterday we took out the lows and that's what led to our stopout just yesterday. And so what I want to remind you all about is when we incorporate that ATR, we do so as a means of trying to stick with the trade for as long as possible. And notice here we came down once, twice, a third time, a fourth, a fifth. It wasn't until this sixth real effort on the 43 and a half area when we actually broke down and got stopped out.

[00:09:38]So, we were in this position for quite a while and our ATR maintained uh the stop. We did not raise our stop in this instance and we did did just get stopped out yesterday, but again, this is going to happen from time to time. All right.

[00:09:55]Uh the other one we were uh taking a peek at there where we did get taken out of our trade was in PNC. So let's take a quick look at that one and then we will uh make some adjustments to the existing remaining shares. So PNC we held for a little less than a month. This one also we did mitigate risk a bit here. We lose about $6 or $7 a share. Let's take a look at PNC on the chart.

[00:10:24]Yeah. So, we got long here and I noticed this was kind of the frustrating one because we did not get enough of a rally. Notice the downs slope to the 50-day moving average. So, one of the struggles in building an at excuse me, an ex exit strategy below a moving average and incorporating ATR is simply that if the ATR or excuse me, if the moving average is not upward sloping, well, then it means that each new day gives us a lower 50-day moving average in this case, and perhaps that changes or leads to reasons for considering reducing the stop. But we don't ever reduce the stop in this class at least.

[00:11:06]We we work with the idea uh that we should be um raising stops, not reducing them. In this instance, I think the takeaway is twofold. One, we could have been smarter about this. We could have been smarter about waiting for the moving average we were building our exit strategy against to actually be upward sloping. That's an that's a mistake that that I could say that I made in entrance here. uh that could be a learning lesson for us going forward as well, wanting to work with ups sloping moving averages rather than downs sloping moving averages. So, we could certainly make note of that going forward. Uh number two here, uh is that we didn't have to use the moving average. We could have simply incorporated the la the lows of this last few weeks in here and then used the ATR below those lows. Now that's not to say that it would have kept us in the position but it would have been a different approach and that's one of the things we too try to bring to the table in this class as well. A multitude of ways that we make our trades and we manage our risk. In fact, as we move off of these positions that have no that are no longer maintained in the example portfolio, we're going to go back to the existing activity and take a look at the positions we have active right now. So, some of these we're not going to make any adjustments on at all, but I wanted to talk about Hallebertton as the lead because last week, what we did was changed our exit strategy on this from a standard stop to a trailing stop. So, in this trade, we've been in this one since uh back here. Uh we bought them on, let's see here, this been March 18. We were running against this 50-day moving average and we'd had 275 shares. We had an exit strategy for us that had us selling a portion. So, we owned 275 and we had a goal to sell into this 417542 area which was possible resistance at the time. In fact, if I pulled this back, you can see the weekly chart on it. So our thought was, hey, if we can get into the rectangle of resistance, we should look to sell some. It's possible we could break through. We would love to participate if it does. So that's why we didn't sell the entirety of the position. Now, if we go back to this, the big shift we've made is to incorporate instead of a static stop that can be elevated by us manually, we changed this to a trailing stop. And what we did here was to ensure that we uh did not use just the average true range which today is a $1.15 or so. Um we incorporated the average true range times three at least. In fact uh $1.15 * 3 would be 345 and I made it 375. And all we're trying to do is to allow the remaining shares to keep running in our favor. And what happens with the trailing stop is we don't need to make an adjustment here. As a reminder, this initializes for us. So today, our trailing stop is now set at 3797.

[00:14:34]That is $3.75, the amount of my trail from the highest high that this stock has made since last Wednesday at the open. And I know that because Tuesday after market close, we placed this trailing stop. And the very first trade of Wednesday morning initialized that trailing stop amount.

[00:14:57]It created a new high and then set the stop $3.75 beneath it. And since it's continued higher, we continue to see this ratchet higher as well. So, our stop is now at 3797. Our hope is that it doesn't come down. But guess what? If it does, we're going to be happy because we've already sold 175 for what amounts to about six plus dollars of profit. And we have remaining shares that even if we get take taken out here, granted we can't guarantee the price because once triggered this becomes a market order, but the odds are in our favor that if stopped out here, we're still going to remain profitable. Uh because, you know, we're sitting on 100 shares and even at 38, again, we can't guarantee it, but we'd be up about, you know, 250 a share approximately. So, uh, having already taken out some of those profits, this might be a way that some traders will look to capitalize while also allowing the stock to provide more upside where it can. The struggle for many of us utilizing this trailing stop is really getting comfortable with the idea of allowing the movement in price. And that's where that average true range becomes so important. Everybody, make sure you're utilizing some component of price to allow the stock enough breathing room day to day, week to week, so that the this trailing stop has a less likelihood of getting hit and you're giving it a proper range. Okay, so we don't need to make any changes to how we're good to go there. Let's peek in on EW. This one in the healthc care space, EW has uh been a has been a bit of a slog here. We've thought about buying this on a breakout originally. Uh it did not happen for us. We got beaten back to the trend line. And this is a long range trend line. I'll highlight here. This is now a 2-year chart. And so we got beaten back to the trend line.

[00:17:01]What we did was we entered at the trend line and put a stop an ATR beneath the uh entrance point essentially the lows.

[00:17:09]And that's why we're down here at this area. So our current stop is in at 74.94 and we do have an exit for half the position at potential resistance similar to what we saw in the Hallebertton trade. So now again because this is down near stop that the struggle for a lot of new users of stop is of stop orders is to look and say darn it I'm so close to being stopped out. I don't want that to happen. I'm going to reduce or lower that price.

[00:17:41]challenge yourself from doing that.

[00:17:42]Okay, we've done the homework. We built the trade based on support. We built the trade based on comfort and tolerance for risk. If we reduce the stop order amount, well, now we're taking on greater risk. Greater risk than we likely have comfort for. Stick to your plan, right? Tra, we build the plan and then we trade the plan we build for ourselves. That's the goal. Okay. So, no changes to EW. What about HP? This one has been moving really nicely for us. A great trade. Uh we haven't been in this one too long. Here's where we are. We got started on this bull flag setup.

[00:18:22]You'll see here. And then lo and behold, the very next day or we got built in on this day here actually, excuse me, based on the 20-day. And then we got the nice explosive move and it's just been off to the races. We got another bull flag in here. We've got the 20-day moving average beneath us today. The 28 uh 20-day is at um 2858 except we built this one using the 10day moving average and that's because everyone as you can see going back to let's just do the six months here just to kind of highlight it. We got in here, but since we have not had a single close below the 10day and so when we put the stop in originally, it was uh below the 10day by the amount of the ATR. And today, the amount of the ATR uh leads us to be able to increase this stop up to 2863.

[00:19:16]So, the math on that is the current 10day is at 2969. If you'll notice my my little arrow here pointing to it, 29.69 at the close today. And then we go with the average true range beneath that by $14.

[00:19:33]So 29 69us $14 leaves us at 2865.

[00:19:41]But we don't like fives and zeros for our stops because we know that that's a place that's common for exit strategies like this. So, we're going to come beneath that by some pennies. So, maybe, you know, 2862, 2858, anything like that, it's going to be fine. And in this case, we're actually looking, we're able to raise this, you know, in the neighborhood of about a dollar plus. So, that's a nice adjustment to be making here. And as you hope, I hope you see, I'm just clicking and dragging that order higher, everybody. All right. So, here we are changing our stop to 2857 on the full 200 shares. There we go. And you know what? Again, while we can't guarantee that price, the odds favor us in being stopped out and staying in a profitable scenario there, our entrance at 2455.

[00:20:33]Um, so we are looking to kind of protect about four bucks worth of profit here, which would be terrific. Um, but again, the key here is looking at the position constantly, knowing that we need to raise the stop, taking the action to do so. You don't have to raise it every day. You don't have to raise it even every week. But one way to be thinking about it is if you're not checking it weekly, check to see, has the stock made a new high since the last time you made an adjustment to the stock? The answer is yes, it's a good time to consider making another one. All right, that's HPE. And then our last one is VeraSign VRSN. We just got started on this last week. Uh let's take a look at it. I'm going to go ahead with the 20-day on this one. Yep, we got So, this was a lovely little consolidation effort in here, everyone. As you can see, kind of went sideways and we were thinking about it, saying, "Hey, maybe we can get a breakout here." And we got put into the trade right along the 20-day. We used the average true range once more, but in this case, um I think the math says we did it against the 50-day moving average. Let me put those back up. Yeah, I think what we did was use the 50-day here at today. It's at two just shy of 260. And um I mean, because we've got a pretty healthy distance here, don't we?

[00:21:59]So, the average true range on this stock is big, $820.

[00:22:06]And so our current stop is at two just shy of 249. Yeah. So we were using the 50-day last week when we when we developed this. And that's okay because we just really wanted to give it as much wiggle as we can. As you can see with the so-called golden cross the uh 50 to the uh through the 200 to the upside um starting to change trend over a longer window of time. So if we use our 25963 minus the1 uh $820 that gives us 25143.

[00:22:44]I can also change this by rightclicking and collect uh selecting cancel replace.

[00:22:49]And here I'm just going to make the adjustment right here. 25143 remaining good till cancelled. working to capture an extra three points for protection here. Uh but again, once that triggers, it becomes a market order to sell. You know what I like about this exit strategy right here, everybody, is it's still below the confluence of the 50 and the 20-day simple moving averages. And I think that that's an important reminder uh because if it is going to get beaten back at all, that's fine. We don't mind the stock getting beaten back from time to time. What we don't want to do is stick with it if it gets back below that ever important trend. That would be fairly significant.

[00:23:33]So, uh we wouldn't want to necessarily stick around for that. And then I'll just remind you once more um that we've built this number of shares so that it is comfortable relative to our tolerance. So, if we got stopped out in the vicinity of that stop level, we would not lose more than our comfort zone of $1,000. That's what we're striving to do on each one of these scenarios. So, we've made some adjustments here. Now, we get to the new stuff for you all. Now, um I'm going to uh talk briefly about the scan. Uh what we incorporate in this class is a fairly basic approach. I'm going to load in what is my what I call uptrending all time frames. And essentially uptrending all time frames. Um, go ahead and ignore these positions down below because these are not for this screener. But ultimately, all we're looking for everyone is the uh uh group of our choosing uh to be and and scanning that group basically for stocks that are above their 20, above their 50, and above their 200 day moving averages.

[00:24:44]It's not a lot of technical jargon or technical approach. It's just looking for stocks that are in uptrends. The strong likelihood is if the stock is above the 20, the 50, the 200, they're in an uptrend most likely. Now, this doesn't mean that they're going to be in an uptrend, ready to be purchased, though. And that's where it's incumbent on us as traders to make sure we're doing what I like to call chart triage, going through as many symbols as we possibly can. Now, I got to I have to be honest with you guys. I spent the better part of an hour plus going through four areas of the market today. Industrials and financials, healthc care, technology, and what I found was more charts than I could really shake a stick at. I have uh about eight or nine that are potential, you know, for example purposes. I want to move through these rather quickly and then we will place a couple of example new example trades and we'll walk through the process once more. But I want to remind you of the process being so paramount to what we want to do. So um one thing here and in this scan you'll notice it is scanning the S&P 500. This particular one is is looking in technology. I'm going to already I've got the list set. This is industrials.

[00:26:09]So, let's open up my chart and I'm going to pull off my orders, pull off my trade so these charts clean up a little bit.

[00:26:18]We'll go back to a standard 2050 day 20 52 200 day moving average and then I just wanted to work through a few of these symbols. So, um you're going to see that there's some intriguing opportunities here. You have gap moves, gaps that are being maintained. A lot of traders are going to look at the action in here and say, "Well, check this out, everybody. We've got a gap held for 3 weeks, and it's allowed the 20-day moving average to catch up." Some traders would look at this zone and call it support. They might use the low here and use an average true range beneath that low as a stop order exit strategy.

[00:26:58]That's an opportunity for some. Other traders might look at the 20-day here.

[00:27:02]You've got the 20-day coincident with these last highs. There's a little bit of confluence of of value at this 908 approximation. So, you know, that's another thing for consideration. But ultimately, gang, look at what we've got. We've we're going to find quite a few charts that are going to maybe catch your eye. General uh excuse me, Union Pacific bull flag at the 20-day moving average. um not broken the bull flag bullishly as some of you will want to see, but it has recently today tested that 20-day. What about General Dynamics? A lot less enthusiastic here.

[00:27:36]Norfolk looking a lot like UNP.

[00:27:40]Week in a bit of a uh consolidation.

[00:27:44]Cumins working a bull flag trying to get out of it. did have a low day established on Friday and then yesterday closed above the high of the low day.

[00:27:57]Granted, it's a quick quick two-day retreat, but you're already back above it. So, um that's one of those interesting areas. 20-day a little far away now still, but traders might look at that.

[00:28:11]Deer kind of hanging out in consolidation.

[00:28:15]Um let's see. the gener uh GEV GE VNOVA making a similar move here fighting it out at the 20-day uh did make lows the low of the trade day or low of the pullbacks there last just yesterday still haven't broken the downtrend line so a lot of traders are going to be patient you know a lot of you wait for the break of the downtrend on these flag scenarios before establishing a new position but that's something for consideration as well in this space um specifically I did have GEV as a kind of an intriguing chart. I also had one that I'm unfamiliar with and I always like talking about stocks with which I'm unfamiliar. Here's one HWM Helmet Aerospace. Um the thing that stood out to me on this one, gang, it's all about the use of the earnings period that created a gap through prior highs and has now given you an area of possible support. So once more if you know one of the things we talk about in this class in particular is the importance of gaps right how gaps can tell us quite a bit about areas of potential support areas of potential resistance doesn't mean that this level has to hold but if it doesn't hold then the the the likelihood becomes hey we're going to get thrown back to an area that we need to revisit.

[00:29:37]I don't know where that area could be.

[00:29:39]Uh maybe it's a short-term uptrend like so. Maybe it's one of the moving averages. Maybe it just needs to break down and fill this gap, right? We don't know. But ultimately, all of these could act as areas of support, right? And some of you traders don't mind that you have multiple areas because it gives you the confidence to step in and then trade layered exits. So, you know, if you've been in a trade like this, let's say you're, you know, a trader that's been um happy with the position, you got in somewhere in the beginning of the year and you're feeling really good. Uh you might say, I'm going to try and capitalize as much as I can. If it breaks below the gap zone, you might set a an exit strategy for a portion of your trade beneath this, maybe 25%, maybe another 25% beneath the the former resistance. now potential support.

[00:30:37]Again, possibly incorporating a an ATR beneath that breakout level to place a stop and then ultimately selling the remainder or anything that's left should the trade break the trend line. Right?

[00:30:52]Having an idea and going forward with a clear plan to exit those positions along the way, this percentage, this percentage, etc. can be a really comfortable way for you to go about managing your trades. That's what we're hoping to do is provide a little bit of comfort here.

[00:31:13]Uh I did have one more in this list, I thought. Let me see if it's still on there.

[00:31:23]Does not appear that it's on the list.

[00:31:25]So, it fell off in the in the process of my pre-work to the close. So, we will move off of industrials, but I wanted to just take a look at that. Uh, next up out of industrials is financials. We've got a couple of intriguing ones in here.

[00:31:41]We did lose since we lost PNC from our portfolio. We no longer have a financial position. So, we could consider a financial position here.

[00:31:54]Uh, a couple of the ones that stood out to me were, let's see, oh, there it is. Morgan Stanley. So, what stood out about Morgan Stanley?

[00:32:10]Here we have a stock move to new highs following earnings, right? Had a nice little gap and allowed everything to get caught up. So, you've got a huge tail today and closed above the 20-day once more. You know, we don't know if there's more upside necessarily. Always helpful to come back to the weekly, but boy, when you look at a weekly chart like this that's been working strong against a 50week moving average, that's this purple line in here. Uh, and it just basically it pulled back to the 50week moving average, rallied aggressively. This is a a nice visual longer term of a potential cup and handle. So you've got a deep cup like so looks like a nice V into the handle and then the handle here is just basically the action of the last month plus. And so in this case, everybody, that's what we just drew in, right? Looks just like a cup and handle and yet it's a cup and handle with a high handle at an area of all-time highs. Not a bearish scenario, not yet broken out, but you can have you have a couple of different ways you could go about managing this one. So, you know, looking at that last low, our last low here was 18490.

[00:33:34]Okay. And our last trade today is 190 188. We're going to call it 192.

[00:33:43]So, we probably need to give it a little bit of wiggle room, maybe into that 193 area for a buy limit order for setup at the open tomorrow. Remember, you know, if we put it in at 193, that's an or better price. If it opened under 193, whatever that open price is, that's the price we'll receive. We won't pay 193 just cuz we set our limit there. Um, but our exit strategy needs to be under $184.90 by the amount of the ATR or the average true range. And in this case, that's $416.

[00:34:24]So, we're going to do a little bit of math there. From $18,4.90 minus the $416 tells us we should have our stop at 18074 or below. And I'll remind you once more, or below when setting our stops because that's what we're trying to do. We want to give it a little bit more wiggle room where necessary. So if we are in at 190, we have to do our math to ensure that if we're taking we have the opportunity to be a buyer at 193. So we we're going to use that math. So uh 18074 minus 193 entrance leaves us with $126 of risk and we have a $1,000 maximum loss. So, we take $1,000 and we divide it by 1226.

[00:35:18]And then we know that we can own a maximum of 81 shares. Now, we're not going to own 81 shares because 81 shares at 193 would be a bit more than what we want, 15,633.

[00:35:33]And our max position for a full position size is $10,000.

[00:35:39]So, we can't go as high as 81 shares. We could certainly do half and do say 40 shares and then uh we reduce the likelihood of if getting stopped out that we would come close to even the $1,000 of risk or the 1% tolerance that we've set for ourselves. So that's perfectly appropriate for this position.

[00:36:02]So we will go with 40 shares at 193 or better for tomorrow's business. And so here's how we'll do that. I'm going to go in with a right click, buy custom, and well, you know, we're admittedly we're buying before this breaks.

[00:36:24]Why don't we leave this without an exit to the upside to see if it'll run? We will go with a standard stop. If it breaks out, then we can start talking about setting the target on it, which will likely be based on the height of our cup that we've got here, uh, which is about a 40 point depth approximately, which may give us somewhere in the neighborhood of 230 as an approximate target zone. But more important than anything, let's get into the trade and then let's use an order to protect the shares we do buy. Uh, and if it does run on run in our favor, then we'll make adjustments along the way. All right.

[00:37:02]So, tomorrow, this is only going to execute for tomorrow if we can get in at 193 or less. But our stop exit needs to be good tilt cancelled.

[00:37:13]And we are going in at 18074.

[00:37:18]All right, good tilt cancel. So, we'll confirm and send. So, we're buying 40 Morgan Stanley at a price not to exceed 193. If we get the shares, we're going to enter an exit stop order at 18074.

[00:37:30]That's a trigger. And if triggered, we get a market order to sell. That means we cannot guarantee price in any way.

[00:37:37]All right. So, we've got that order in Morgan Stanley set for tomorrow. Now, let us go in our final 10 minutes. We are going to go to healthcare. I had a couple of real interesting charts here pop for me. One of which is a company, a little company called Eli Liy. Now, the reason that this one popped for me, everybody, I think you can see it.

[00:38:03]Notice we've got all the moving averages converging on one another. But more important than that, I think, look at this action of the last two weeks holding the 50-day moving average here.

[00:38:15]Now, I just got done complaining about utilizing a downs sloping 50-day moving average. So maybe the 50-day isn't our ideal um moving average against which to base our exit strategy.

[00:38:29]However, notice the 200 day is up sloping. So let's use the 200 day here.

[00:38:36]The 200 day is one, pardon me, 918, excuse me, 91802.

[00:38:44]And according to uh to the ATR here, our ATR on this is 3358.

[00:38:53]And that tells us that we would have a stop at 88444 if we wanted to use the 200 day as our exit process essentially. All right. So from 98 sorry our current trade is up here at 989 990. uh this price per share is going to require us to be a little bit uh more aggressive with our entrance. We're going to have to, you know, give it even further of a padded limit. Um probably up in the neighborhood of a th00and, I would say.

[00:39:28]Uh so if we did that,000 uh as a limit and our exit is at 88444, well, we're risking a lot. 11556, right? So 11,556 and we divide that into our,000.

[00:39:49]We can own no more than eight shares, but that's fine. Eight shares would be a max position size essentially be about 8,000. We're going to go smaller. We're only going to go with five on this one, gang. So five shares at a limit of a,000 with a stop at 8.844.

[00:40:10]Okay. So the um easiest let's go ahead and in this case everybody um we have a high up here. We have a potential broken downtrend here that has been validated potentially right. Um do you guys want to go with a target up there? See if we can't put ourselves in about a 10% trade and sell at the at the all-time highs that triple top back there at 1, you know, 1,11015.

[00:40:40]We could absolutely do that. So, let's start with that. Um, I will admit this one, if we are willing to be sellers up there, doesn't fit the one to three risktoreward ratio that we might be striving for, but it does maybe it gives you the confidence nonetheless to place the trade. You know, we've been at that ledge before. If your balance and portfolio and your process allows, you could have a greater position size and you don't have to sell the entirety of it. Certainly, you could work and sell half or 25% or whatever it is you'd like up there at that 1,110 area. Let's build the trade around that though. So, let's go with a buy custom with OCO bracket.

[00:41:28]Remember, OCO is one cancels the other.

[00:41:31]That means we cannot overpurchase and over or oversale, I should say. So, we're going to make uh five shares here.

[00:41:38]Our limit for tomorrow is not to exceed $1,000 per share. And then a good till cancelled limit sale at 1,110 and a good till stop. And the stop again 88444 which is the equivalent of one average true range below the 200day simple moving average.

[00:42:08]Not a guarantee by any means, but it is going to give us a potential to stick with this trade a little longer. All right, so there we go. Uh we're going to be looking at about no more than a $5,000 position to begin. um potentially. Could we add to it down the road? Yeah, but it's going to be pricey to do that. So, uh we'll go ahead and see if we can't stick with this one.

[00:42:29]I'll tell you, a lot of traders like the idea of buying in the vicinity of the 200 day moving average. So, we're going to go with that. Uh and as always, read your order types and messages, everybody. All right. And then the final one we're not going to have time to place a trade for, but I just wanted to bring it up because it caught my eye. Uh and that again is these moves, these gaps following earnings can be so instructive everybody. You had this stock rallied into the same ledge right ahead of earnings and then the earnings hit and instead of getting pushed back it exploded to the upside and now you've got a new possible area for shortrun support. Uh you are building in a bit of a bull flag. Higher lows, lower highs.

[00:43:17]Let's see if there's anything on the weekly here. Okay. So, the reason that this really stands out everybody is you've got a longterm broken downtrend. Look at that. So, that stands out. And not only do you have a long-term broken downtrend, but you've got bullishness in the interim. Uh strong move off of the big low here.

[00:43:39]Stock up about 150% since Jan.

[00:43:44]Um, you know, we know those returns aren't apt to continue, but looking for opportunities in stocks that have bottomed, have broken downtrends can be a process that some traders are are interested in. Over the long haul, this kind of looks like an area of former support or former resistance, potential support. And when you zoom in and you see, well, it was I mean, it was resistance here, it was resistance here.

[00:44:12]Come on, do it for me.

[00:44:16]Wanted it to put that oval. There we go.

[00:44:18]Resistance there. And then it was resistance here for a brief minute, right? A couple of weeks and then what once was resistance became support when we got thrown right back to it a few weeks later for a test. Not at all uncommon. So, just wanted to make sure I covered a number of those key charts with all of you today. uh had some really intriguing ones available. Now, if you're catching this class in the archive, everyone look down below in the show notes, you'll find the scripts that are tied to the uptrending all time frames um scans that I've been incorporating. Um and you can absolutely take those and and check them out in your own example trades, see how they can work for you. Uh, and of course, always feel free to reach out if you have any questions about that. You can find Connie and me available on X.

[00:45:14]Connie Hill CS, Kevin her CS. Love to hear from you. If you like this conversation today, hit that thumbs up button for me down below. That'll help me out in the replay of this on the YouTube algorithm side. We would appreciate that. Make sure you're subscribed to the channel, everybody.

[00:45:30]And don't forget, tomorrow morning, I'm kicking off the day with Trader Talk in today's market. I'll be running solo for you at the open. Come join me and we'll take a look at how things appear on the market for Wednesday. And with that, have a fantastic afternoon everybody. I look forward to seeing you all again real soon.