Good morning, VWAPians!
While I had a GREAT time in Baltimore with the Money Morning LIVE crew, it’s good to be home!
I’m wiped out. I think Bababooey laced my muffin!
(It was probably Producer Liz…)
You know when I’m straight up trippin? Any time I suggest putting on a call spread.
During Thursday’s Warlock’s World LIVE stream, I was hunting Clovis Oncology (CLVS), and was considering putting on a call spread.
While spreads are a great way to get trades for cheaper than just straight calls or puts, I don’t trust them.
So much that I have Bababooey threaten to taze me if I even mention it!
Well it’s a good thing I didn’t put on that spread, because it would have been a loser.
Even though I’m the Warlock, sometimes I even need reminding to stick with what works – VWAP.
CLVS call spread would have been a disaster
The chart above is from what happened to CLVS the rest of the day on Thursday.
A call spread would have been practically WORTHLESS by the end of the day.
But, if I had just trusted VWAP and shorted the stock, it could have been a nice payday.
But Kenny, you’re talking about Thursday, weren’t you trading LIVE in Warlock’s World on Friday?
Yes I was, guy in the back. Glad you mentioned it.
After CLVS had captured my attention on Thursday, I decided to keep my eye on it and add it to my watchlist on Friday.
Warlock’s Watchlist on Friday
You know how much I enjoy revisiting stocks that I previously traded.
Well look what happened next with CLVS.
CLVS broke VWAP to the upside on April 1
After watching CLVS during premarket trading, the stock finally broke its range to the upside right around the $2 mark.
In less than 15 minutes, CLVS had risen to $2.15 per share.
A thousand shares of CLVS had a relatively low cost at the VWAP break, at $2,000.
That’s a potential $150 profit in less than 15 minutes. It may not seem like much, but remember, there’s still the entire trading day left.
And CLVS wasn’t done there…
CLVS, blue line to orange line
CLVS broke the multiday VWAP at $2.41 per share, and rose all the way to over $2.60 per share before the end of the day!
But CLVS never really gave a reason to exit the trade!
On 1,000 shares of CLVS, just the blue line to orange line move would have been over $400 in profit.
This is why we don’t do call spreads. This is why we don’t do overnights in Warlock’s World.
The call spread trade would have been a total DUD. But staying disciplined and letting an idea be validated by VWAP?
These are the types of trades you’re missing out on by not being a member of Warlock’s World.
And this is what we’re doing EVERY DAY during my nearly TWO HOUR Warlock’s World live stream.
I’m breaking down the stocks in my watchlist, calling out significant price levels, AND taking requests for my community, to help keep all my traders on top of their trades.
But the only place to get this kind of trading and training is with ME in Warlock’s World.
I’ll see you there.
Kenny “The Warlock” Glick
April 04 2022