Here’s tomorrow’s daytrade…today! Day two of the Cardylitics ($CDLX) trade setup. (March 05, 2020)
CLDX
I want to go back to Cardylitics ( NASDAQ: CDLX ). I mentioned this yesterday as the day trade that didn’t happen yesterday but could happen today, it didn’t, it was close, or tomorrow or more likely. or Monday. So I just want to go back to it. I don’t like to just sticking them out there and then forgetting about it.
Today the stock goes down again, lower intraday low, lower intraday high. The stock opened lower than it closed yesterday and it is trading even lower than that now; we’ve got about an hour of trading to go. We are not really seeing a whole lot of buying into the last hour. So my sense is that the stock is probably going to close right where it is now, maybe even lower.
That brings us to tomorrow; I wouldn’t be holding this stock, I am just watching it. Just if the stock starts trading up tomorrow, let’s say it starts trading above today’s open, which is 53.53. Let’s say the stock starts trading above 53.53, even at the open, that would be a really good sign.
The basic thing we are doing here is looking at risk. We are not really trying to catch a knife; we are trying to take it in our hand after its rebounded after the stock is done falling, found some reliable support. Right now the low is 51.13, so this is the drop dead thing. If the stock trades at like 51.10 even I would be out of it. You have got to give it some kind of a drop dead level to where if the stock is here I am out. So the thesis for this trade is when the intraday low is higher than the prior intraday low, that’s an indication that the selling pressure has peaked and the stock is going to be free to move higher.
That is literally what I would do when you are framing this trade and you are probably going to watch this after the market closes today; but 51.13 is your drop dead point. If the stock trades below there just get out. There is $54.13 remaining between your exit, we’ll say 51.10, and ultimate support for the stock, which is zero. So this stock could fall a long, long way and you don’t want to get caught holding a stock, wondering where your exit is. Your exit is on a move below 51.13 on the downside. On the upside, frankly, I would look for $5.00 for the next week or so. That is really what I would look for. Whether we get that or not, I don’t know but that is kind of what I am shooting for.
Free Chart