How to Find Trade Opportunites Within the Moomoo Community
Looking for Trades Around Every Corner and Under Every Rock
There are so many good trading opportunities at any given moment. Keeping up with every rallying stock is almost impossible. So, there is always a good trade somewhere to be found if you are willing to keep your eyes open. The community feed is a place where I will often come across profitable trades.
The community feed is easy to find. With just a few clicks, you can start conversing with other traders on the platform.
I was scanning through the Moomoo community feed, and I came across some comments from @Carla Lee . You can see these comments in the link directly below.
The post was not specifically about $Kratos Defense & Security Solutions(KTOS.US$. But the mere sight of the ticker symbol got my brain moving.
Carla's comments spoke of some recent insider purchases by Cathy Wood's ARK Investment Fund. $Tesla(TSLA.US$was the highlight of Carla's post. But what really caught my eye was KTOS.
Russian War Rally
KTOS, like many other companies in the military industrial sector, experienced a strong rally following the onset of the Russian war. Some companies within the sector received an even bigger boost during the conflicts in Palestine and in the Red Sea. Since the intense media coverage of the global conflicts has died down, I had long forgotten about the military industrial stocks.
Once I took a look at KTOS's chart, I noticed that the price action is within its first consolidation phase following a very strong rally. A typical consilidation looks something like what you see in the chart directly below. You can see how KTOS's price action is rebounding off of support. This looks like a good trade opportunity, in my opinion. Especially with the ongoing conflicts around the world.
Even Moomoo's automatic charting tool is calling for some upside, as you can see in the chart directly below. The chart shows a breakout from a short-term downward sloping wedge pattern.
The Trade Setup
As a technical trader, when I see price action rebounding near previous highs or previous consolidation zones during a strong rally, then I am thinking about long positions. The trade setup for this situation is very simple.
Assuming that the price will be the same at the open of the next trading session, I would enter the trade at open Monday. I would set my stop loss near the areas where the price rebounded previously. I would expect to take some profit near the previous highs, around the $21.00 price point. This would provide a reward to risk ratio of slightly less than 3 to 1.
Possible Gap Resistance
The only thing standing in the way of this potential rebound would be the possible gap resistance like you can see in the chart below. You can also see how the price action quickly rejected this area several time in the recent past.
Conclusion
The technical setup for this trade could not be any more perfect. It is almost a perfect price channel. Channels like this make buying near support and selling near resistance as easy as pie. Of course, I could be wrong about this swing trade idea, but this trade looks like a no-brainer to me. If we dont see a huge gap up when the markets open up, then I will definitely be entering into a long position.
What do you think? Is this a good trade idea? Or will I fail miserably with Mrs. Cathy Wood?
Analysis Update
After reading the comments section, further analysis was necessary.
There are a couple of things that I left out of the analysis that might prove important to mention.
The chart directly below shows how the price action recently dipped below the trending channel. The rally could continue, but this is the first sign of weakness that we have seen in the current rally.
In order for the rally to continue, then we need to see the price climb above previous highs. This area has a confluence of resistance levels. As a technical trader, I would consider this a strong area of resistance.
If I see big sell orders building up within this area, then I wouldn't hesitate to take profit. You could always get back in if we do see a breakout. Hopefully, with minimal slippage.
Good Luck Trading
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
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Trade the trends via technical, fundamental, and macro analysis. Day Trades, swing trades, and long-term investments.
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Kevin Matte : I agree with you, if the trend continues! I'm bullish on this. I'm curious what you think about the fibonacci trend repetition ^^ I think it can be repeated once or twice, but 3rd in a row I doubt it !
SpyderCallOP Kevin Matte: I didn't even consider the short-term Fib levels. I like how they fit perfectly with the rally.
I have a lot of resistance levels at that previous high, so it will be difficult to break through, I imagine.
I added a few paragraphs to the end of this post. Check it out. I needed to add a little more info about the technical setup.
SpyderCallOP Kevin Matte: And another thing about that picture you posted with those two charts. It almost looks like you are making the beginnings of an Eliot wave. And there is one more wave up to complete the Eliot wave. Just a thought.
MonkeyGee : great catch. I think you did more analysis than Cathy.
MonkeyGee : Just looked into the trade a little more. Just because of Cathie's well-known trading techniques of buying high and selling low. I see an inverse head and shoulder forming, and all the indicators are turning. maybe it's just me reading tea leaves. But I have added it to my watch list. thx u
SpyderCallOP MonkeyGee: for sure
Trytosaveabit : Really enjoyed your write up! My only question is are you seeing what I am in the market in general? Technical Analysis sure seemed a lot more reliable of future moves pre 2021? So either I’m becoming more jaded which is starting to cloud my vision? ( possibly ) hehehe. Or maybe I need to take a break? ( also probably not a bad idea ) Or you will confirm what a few others have? That yes technical analysis still works, but does seem a fair bit less reliable! Look forward to hearing your thoughts!
Thank you, BIT,
SpyderCallOP Trytosaveabit: It works better for some tickers as opposed to others. It seems like it doesn't work at all for some stocks. It seems to work better when there is a lot of liquidity. For example, if there is a ton of volume traded every day, then TA seems to work better.
For those names that TA seems to work bette. You will get fewer false signals on longer timeframes as opposed to all of the false technical signals you csn get on smaller timeframes. Unless you are in a very strong rally like NVDA, then you would use the very short timeframes to buy dips. I also noticed that the price action of some companies or sectors will behave differently than the price action of other companies or sectors. Like they have their own character or something. It's almost as if each character requires a small tweak to the TA that you would use on it. You kind of want to get a feel for each individual stock or character. Sometimes, Fib levels will work for one stock and not another. Sometimes, only horizontal support/resistance levels will work. Or sloping trendlines will work for some more than others.
TA can be confusing sometimes.
Trytosaveabit SpyderCallOP: I appreciate you sharing your thoughts/experiences! As I said, I still use and rely on it a good bit. Just seems, to me anyway. That it used to be way more accurate! Hehehe! But thanks for the response.
Stock_Drift : I think $Kratos Defense & Security Solutions (KTOS.US)$ is an awesome idea for a long term hold.
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