This week, one name popped up on our radar courtesy of my brother 8ball: SAVA.
Had I ever heard of it before? Of course not.
Did 8ball mention this name to me weeks ago and I forgot about it? Absolutely.
But this week, all that mattered to me was that SAVA was gaining volume, and that it was breaking VWAP.
It first hit our radar on Tuesday and made a big move initially off the VWAP.
You can see Tuesday’s chart below — the first move being at 10:30 am ET…
Now if you were like me and you missed that first move, you don’t chase it.
You wait, you watch and you let the stock come back for another chance.
As we can see, SAVA gave us that chance later in the day. It retested the VWAP two times. It didn’t roll over. And that was our signal to buy it. If it doesn’t roll over and die, and finds strength at the VWAP, chances are, it will pop off higher like it did toward the end of the day.
Again though – while we don’t sell our entire position at one price, we do sell our entire position by the end of the day, because we have no idea what this stock will do after market’s close.
It could crater all the way to 0. That’s why we stay liquid (and lovin’ it).
But we don’t take our eye off this name, oh no.
If the volume keeps up for the rest of the week, then we continue to plug away and get paid while doing so.
The next day’s chart on Wednesday looked like this…
The chart above is a huge lesson in day trading.
Just because a stock jumps off the VWAP does not mean it’s going to rip straight higher.
But if you bought into that move higher in the first 15 minutes, you should have been selling into that move and moving up your stops.
You need to be quick.
This is a job, and you need to be paying attention to what’s happening when you own a stock. As quickly as SAVA moved up in the day, it cratered back down through the VWAP.
And you don’t just buy at the VWAP.
Because like what happened on Wednesday, a stock can crash right through the VWAP. But if it hits the VWAP, consolidates and finds strength… THEN you have a buying opportunity.
This was a tougher day to trade SAVA than Tuesday, no doubt.
But you can’t get blown up by a hard day if you already have your risk defined ahead of time.
Regardless of a challenging, choppy session, though, we keep this name on our watchlist for a revisit…
And this is what happened yesterday:
SAVA broke VWAP early on a MONSTER candle. And it gave you one more opportunity to buy when it was consolidating on the VWAP.
Then it broke higher and just kept going for the rest of the day.
If you were in it, you sold into the moves higher, and might have only been stopped out in the afternoon.
But we take those profits and we run with them.
You could have done the same thing with SAVA today.
But hey, if you liked SAVA at $50, you would’ve loved it at $38!
And from the beginning of the day it shot up through the VWAP giving you a chance to buy — and a chance to sell for a quick pop to $45 on the day.
You don’t need to trade dozens of stocks to make this work. Just find one name that works, focus on your setup, define your trade, and find your day’s pay.
Then you sing a little silent karaoke, live to fight another day, and do it again tomorrow. Not bad, right?
September 23 2022