Here’s how I traded Robin Hood ($HOOD), and will be trading it tomorrow. (August 03, 2021)
HOOD
Today we’re going to look at the HOOD ( NASDAQ: HOOD ), it’s all good in the hood, Robinhood ( NASDAQ: HOOD ). Look, this stock had a heck of a move today, up just about 25 percent. And from the opening high, just last week when the stock opened, it was up 16 percent.
This is one that we covered today, during the day, we put this on our Active Trades at $40.00 with a stop, with a protective stop, and then rode this puppy into the close. We are still long the position but I did suggest taking some profits to just kind of lock in a gain and then that would allow you to move your stop up on the remaining position. And even if the stock imploded you would still be okay, you would still wind up having a profitable trade.
The reason that I suggest doing it this way is because you can lose money on any trade, you can make money on some of them. And every once in a while there is one that you can make a lot of money on. But in order to make a lot of money on a trade, first of all, you have to stick with it for a while.
You are not going to make 25 or 50 percent on a stock in 15-minutes, unless you are trading a penny stock and you bought it for $10.00 and then some idiot comes behind you and buys it from you for 15.00. It is going to take a while for you to hang onto this to make that kind of money and you have to understand what is really driving this stock up.
Listen to me, this is really important stuff, I know my voice sounds lilting and calm but it’s really important for you to hear what I am saying. If the stock had made this kind of move at the end or after a big massive run up, then you kind of have to be careful because chasing a stock like this might not work out well because it turns out that was kind of the climax high, it was the last of the buyers coming in because they got the “can’t help its” and they had to buy the stock.
That’s really not the case here. Guys, this is the price action of the stock, right here. Yesterday, a smaller trading range. I said this in my note last night, you want to be looking at this for a move here on a 15-minute chart, and that rewarded us really well, really, really well and we are still going. Frankly, in my view, we are probably going to see a move to the upside tomorrow, probably at the open. In fact, even as I speak the price is up, this is after hours of course, the price is up to $51.00. That is kind of a big deal when the stock closed at 47.00, so this is a trade that is still ongoing.
The point for bringing this up is, in a weird way, I kind of don’t even think it’s too late to make the trade, I don’t. Now, would I be buying it tomorrow morning? No, I wouldn’t. But it is certainly one that I would be watching, and you have to really look at this as a day trade. When you see a stock that gaps up this much, typically you want to sell into it. But in a case like this with Robinhood ( NASDAQ: HOOD ) you can’t trade that dogmatically, you have to be able to watch the stock.
With that said, this is kind of a GameStop ( NYSE: GME ), this is an AMC ( NYSE: AMC ). This is the kind of stock that could, look, it’s running up on stupid money and I don’t even mean that in a pejorative way. This is not Goldman Sachs ( NYSE: GS ) buying this stock. They could have got all they wanted pre-IPO. And if they were really interested in it they would have bought it back here when Cathie Wood did, so this is retail guys and you don’t know how high they are going to be pushing this stock. Particularly, when the market overall just kind of stinks.
There are not a whole lot of stocks that are moving like this. And so it’s almost like this is the only game in town. But don’t get the wrong idea, I am not pounding the table saying, you’ve got to buy, you’ve got to buy. Any price, any price. And I will get those people, sometimes I feel like a politician, where you will take one little snippet of what I said and you will say, oh, you were wrong.
This is not what this is about. This is about managing your risk. And there is always the risk of missing out on the upside. There is absolutely that risk of missing out on the upside. So my suggestion is, watch this stock tomorrow. I am not going to tell you how to trade it now because there is a lot of time between now and tomorrow.
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