This week, we’re going to use one of our trades to demonstrate exactly how you can spot a VWAP break.
The company in question for our example is IVERIC bio inc (ISEE).
It doesn’t matter what the company is.
The VWAP gives us an idea of when a stock is bullish and when it’s bearish.
And the setup is the most important part.
In yesterday’s session, ISEE was strong right out of the gate breaking above the VWAP line.
For those that got into it, it’s best to sell into the move higher in increments, move your stops up, and make sure you don’t get caught if it comes back down.
The picture below illustrates this move up and then when it rolled over back to the VWAP line.
Remember, once you get into a stock and it’s moving upward, you need to lock in those profits.
Because no one knows what a stock will do or when big players are going to come in and buy or short a stock.
But what if you missed the move in the beginning?
Well, if you were paying attention throughout the day, ISEE gave you an opportunity to get back in as the picture below shows.
Once it tried to roll over and die, the stock’s price climbed back to the VWAP line, and held there.
It consolidated, found strength, and if you were quick enough to follow it on the break higher, you could have had another chance to buy into a bullish sentiment stock.
The trading day goes from 9:30 am to 4 pm every day.
It’s fine to be done by the morning, take your profits and leave.
But it’s even better to monitor your watchlist stocks, buy into the VWAP moves and net profits throughout the day.
ISEE is just one of thousands of trades out there that you can get into using the VWAP as your guide.
September 09 2022