TRADE SET-UP
Target was sitting about 1/2 way within a long term upward trending channel (blue). Recent movement had found support and resistance from previous s/r zones - green zones above and below current market. The technical trade considerations accounted for a lift or drop from the channel created by the green s/r zones. Target considerations were the next significant technicals, above or below the market.
TRADE EXECUTION
The macro bias for the market sector (US Retail) was negative; when the market fell past the technical trigger consideration at $76.60 we entered the next day going short on 65 shares at $75.70.
Market remained below our entry before gapping down on the 5th day, landing in a HPTZ and at significant technical support.
The trade was exited on May 18th at $67.87 for a $7.83 /share profit, or +10.34%. While more potential down exists, there was also potential for a bounce: (1) to fill gap; (2) to retrace back to ma's; (3) respecting channel support. Watching the $66.80 level for another potential trigger consideration and 10% move down to $60.00. Filling gap, retracing to the ma's, or the previous green trend channel may offer opportunity for a higher entry if the market finds resistance from any of them.
