A specific trade that doesn't occur that often. After either a very strong or weak open, price starts to consolidate for at least 15 minutes. When price doesn't really pull in, traders will have to chase higher or lower and we get a nice continuation trade.

1. Trend Trend day
Catalyst: Q4 deliver numbers lower than expected.
Setup: Trend Trend day
Trades: First consolidation – Morning continuation
Ticker: TSLA
Date: 3-1-23

2. Bigger picture: QQQ and VIX
QQQ
Q’s have bounced and are
gapping up after a big sell
off. After spik up Q’s sold off
all morning making a >1ATR
move. Price retraced to
VWAP in the afternoon and
reclaimed prior days lows.
VIX level : 23
VIX is elevated and intraday
traders should shift more
focus to market plays
compared to stocks in play.

3. Gameplan
There is a fresh catalyst, but theme of weak price action is also important here. Could
have a setup with continuation to the downside. We’ll open around 119 dollars.
On the daily we had one green day where we couldn’t trade lower, followed by two
small green days where we barely finished green. If we hold below 118.50, we likely go
lower and fill the gap towards 116/115.
I shouldn’t put too much weight on last week’s intraday levels. They are important but
not crucial. Intraday levels that form are also very important.
Small red day.
I don’t have a strong bias, but as long as we don’t reclaim and 120-120.50, I think we’re
closing red today, although it looks like we open above VWAP.
If we can hold above, I want to look for strong long patterns or for extreme weakness
on the backside.
I want to look for extreme weakness when I am trading short above VWAP. The overall
price action I want to factor in. Basically, I want to capture move2move trades on this
setup.
Down trend day
Will be most likely below 116.50. But even then, I don’t think we’ll get a big 1 ATR
down day. 114.0 likely the next target. I would like to take a TT when we break this
level down on volume.

4. Catalyst &
Fundamentals
Catalyst: TSLA gapping down 3.3%. 7.7% premarket buzz which is
high.
For Q4 they put out their delivery numbers which was 405k,
below the estimated 420k which was expected by Bloomberg. Still
highest delivery number, but they also opened two production
plants and failed to produce/deliver more.
Float: 2640 million
Institutional Ownership: 44,80%
Short %: 2,67%
ATR: 10,18.
Average Daily volume (50 day): 107 million.
Gap%/Gap ATR: -4% / -0,48 ATR
RVOL: >3

5. Key levels The inflection level is 118-118.50. Below
this I am more likely short biased.
116.50 is premarket low which should be
significant.
115.50-114. Are also key levels from last
week price action.
Every half dollar will be a psychological
level and show some support/resistance

6. Trend Trend day
– Trade Strategy
First consolidation – Morning continuation
A stock has made a strong opening drive outside it’s range and is now trending. The stock goes
through a period of consolidation as big funds accumulate. With a new level to risk again,
more traders jump in. The consolidation, the first in its trend, usually last 15-30m.
Trade2hold factors: extreme weakness and room to trend.
- Holding below significant resistance level: Premarket low and other prior intraday support
areas.
-Weak market.
-Strong catalyst: Mis on delivery numbers.
- Big bicture: extremely weak: down +40% since December high.
- Room to trend on the daily. Large gap until 108,24
- Weak open through resistance (8/10), but not extended (-0,7ATR OD and -0.8ATR low Trend
PB ) = Room to trend intraday.
-Also gap down was 0,5ATR which is not extended.
Trend Trend day
A stock that is setting up to trend intraday the same direction as the long-term trend. Stocks
don’t trend during the open. The trend can end earlier than the close when it already made a
strong move intraday move. Or sometimes a trend day only starts two hours before the close.
Trend day variables/confirmation
-Shallow and consistent volume through out the day.
-Lower highs and higher lows
-5m trends below 20 EMA, 10m trends below 9EMA.
-Expect to close near LOD.

7. First consolidation- Trade2hold – Trade Management
Trade2hold - Flat
Significant 5m close above 20 EMA:
1) close on above average buying
volume;
2) a new 5m high that occurs after
close;
Goal: don’t sell more than 50%
when going flat.
Reason2hold
-Shallow volume and making lower
highs. Sometimes the trend is still
intact when there’s a significant
close above the 5m 20EMA.
Trade2hold – Exit strategy
-ATR moves: 1ATR, 1,25ATR
or 1,5ATR.
-HTF support levels: 108,27
-Sell into the close near LOD
First consolidation entry.
Trigger: usually a false breakout candle.
Entry: As close to false breakout candle as
possible.
Risk: For this setup with a trade2hold, the
risk should be a little higher than the high
of the consolidation, because we haven’t
had a proper PB yet. This level could be
VWAP or a near key resistance level.

8. Technical Analysis:
First consolidation
– Morning
continuation
Weak opening drive
Usually, a consolidation that
lasts more than 15m
False breakout candle.
Elevated volume when price
breaks LOD
Shallow buying volume in
consolidation
Visible on multiple (1m & 3m)
time frames

9. Reading the tape
Trigger: false breakout and breakdown (38:00)
-After a period of failing to hold above 112, we now significantly
push further. But in the high ,20’s a lot of offers are stepping up. At
,30 there is a wall of sellers that keeps on holding.
-We seem to hold 112 again, there are some bids stepping up. But
the offers can’t get lifted more than ,15. We are back in the range
again.
- On the next push we make a high of ,18 which is significantly
lower. The tape starts to increase, and a lot of red prints are
coming in.

10. What could I have done
better?
• I wasn’t ready enough after a strong opening drive for a first
consolidation setup. I was just thinking on wedge patterns and
trend PB’s, but a first consolidation and VWAP pull in’s are also
options I should always be aware off and prepare for. Therefore, I
have added a new checklist in my excel file of this setup that covers
this specific setup. This makes it less likely I will not consider it/
miss it.