WBA had decent earnings but a net loss due to massive legal costs caused a 4% gap down. Price sold of sharp in the morning, chopped around and then pulled back into VWAP. This was a good trade2hold that I recorded but didn't trade because I was ill.

1. D1 earnings gap
down
Catalyst: 6,5 billion opioids charge clouds small earnings beat.
Setup: D1 earnings gap down
Trades: VWAP pull in
Ticker: WBA
Date: 5-1-22

2. Catalyst &
Fundamentals
Catalyst: WBA reports in earnings that are in-line with the
consensus. But a 6,5 billion opioid charge clouds earnings. They
post a net loss due to these legal costs. WBA gaps down -4%.
Setup: D1 (earnings) gap down, D1 catalyst
Float: 714 million
Institutional Ownership: 59,8%
Short %: 4,03%
ATR: 0,89
Average Daily volume (50 day): 6,2 million.
Gap%/Gap ATR: -4,11% / -1,7ATR
RVOL: >3

3. Key levels Support:
35,65 is the premarket low. 8/10
significance on big gap down.
35,20 and 34 are both longer HTF support
levels. 7 and 7,5/10 respectively, because
34 is a psychological level as well.
Resistance:
37 is yesterday’s low, a psychological level
and a HTF level: 8/10 significance.

4. Trend Trend
day– Trade
Strategy
Stock selection
-Stock in play with a significant (technical) catalyst, earnings report or strong/weak theme.
-Elevated RVOL above 3.
Setup: D1 Earnings gap down/ Trend Trend day.
Does the setup match the catalyst?
Trade2hold factors:
-Holding below significant level: premarket low.
-Weak market.
-Weak daily chart.
-Elevated RVOL.
-Very weak open through support(premarket low) on elevated volume.
-However; open is somewhat extended: 1,5ATR move.
-Room to trend on the daily: no strong support levels.
-5m below the 20 EMA.
-Former price action: there are plenty of gap downs followed by a -2ATR trend day. Over time stocks will
have many of the same market participants and traders, like most humans, are repetitive in their behavior.
VWAP Pull in cue’s/variables
-Shallow volume into VWAP.
- Strong offers at VWAP.
- Any seep above VWAP and the offers immediately reclaim.
- When we do trade above VWAP for a moment it’s insignificant because of:
1) Short duration and 2) low volume.
Does the trade match the setup?
Yes. The opening drive was very weak and after a consolidation we pulled into VWAP. And couldn’t hold
above. Although we are somewhat extended, we don’t have strong HTF support nearby. So, if we can break
LOD, then we should trend lower and make 1,75-2ATR.

5. VWAP Pull In T2H – Trade Management
.
Trade2hold– Exit strategy
-ATR levels: 1,75 – 2ATR, 34,60 &
34,38.
-HTF levels: 34.
Entry criteria VWAP pull in
Triggers: False breakout above VWAP on
low volume OR insignificant reclaim of
VWAP.
Risk: High of pull in.
IF I get stopped out after trigger, THEN I
want to get in higher and set a higher
stop.
Trade2hold – Flat
Significant close above the
5m 20 EMA = end of trend:
1) Higher high after a close
above the 20 EMA,
2) Close above the 20 EMA
on significant buying
volume.

6. Daily chart: Significant weak trend days.
Price is in a clear
downtrend. In October
and November, we made
a decent bounce of +35%
but then clearly topped
at 42.
No close & strong
support levels on the
daily chart.
The blue circles highlight
recent days where price
gapped down and made
-2ATR days and closed
weak.

7. Technical Analysis: Entry
First push/seep into VWAP is on
increased buying volume. Not an
ideal entry point.
The second higher high also
couldn’t close above VWAP. This
was a great entry point.
However, I would have been
stopped out. The volume
continues to be very low which is
a solid trigger of an insignificant
reclaim of VWAP. After another
seep with low volume this is
trigger for a re-entry.

8. Technical Analysis: Pull in on the 3m and 5m

9. Trade2Hold & EOD trend day
Only sell when there’s a real
reason2sell!
Price is trending very nicely
along the 9 EMA. After a 2ATR
move price starts to make a
higher low.
Then price starts to reclaim the
20EMA and makes a higher
high on elevated volume.
This is where the trend day
ends.

10. Reading the tape
Last false breakout = Entry trigger (44:00)
-,39 is the high of day. We break this level again and start stalling at ,43 for
more than 20 seconds. We can’t trade higher and this is a potential top.
-Offers step down to ,37 and some significant bids get taken out at ,32 on
large red prints.
Pull in to 20EMA: first lower high (57:00)
-Price pulls into 20EMA. Bids at ,11 look way strong than offers at ,13 but
the offers are not moving.
-There are a lot of red prints coming in with large sizes. People are
aggressively selling here, and the bids get pulled to ,08.
- Immediately more red prints come in and we trade back below the 9EMA.

11. What could I have done
better?
• When I prepare tickers next time, I should pay more attention to
the daily chart. Are we having similar gap setups on the daily
chart? Did the have above average volume? Were they also in an
uptrend/downtrend/range? What was the intraday price action
like? How many ATR did the stock move?