Hey there, VWAP Legion!
Every day you get sent to your email a copy of my rolling watchlist.
This is my shortlist of all the stocks that will be worthwhile watching.
In the past it has given us some fantastic trade setups, which can be found in all different types of stocks. From lumber companies to tech giants and everywhere in between.
This especially was the case when recently Levi Strauss (LEVI) popped up on my radar one Friday morning…
LEVI: A Lesson in Earnings Patterns
Let me break this baby down for you, step by step, so you know what kind of GREATNESS you’re actually witnessing here.
First, we saw the classic fade through the 1-minute VWAP (blue line) to the multiday VWAP (yellow/orange dotted line) out of the gate Friday morning, which presented an opportunity for nimble short sellers…
LEVI broke the 1-minute VWAP early after earnings Friday
Then, hot-fingered VWAP traders had a second, even BETTER opportunity to short LEVI after it retraced to the 1-minute VWAP and pulled back, giving us the classic 1-MINUTE MULTI-DAY VWAP REVERSAL (sing the song loud and proud!).
LEVI couldn’t break back above the 1-minute
The shares then blew past their multiday VWAP (dotted line) and previous lows, which is often a warning sign (it was for the QQQ!), before dropping about another point.
THEN, ladies and gentlemen, we saw what I lovingly refer to as the “buttcrack bottom” – that W-looking formation circled below.
Those of you who’ve been following me closely know this pattern often acts as a signal that it’s time to be on the BULLISH side of the day trade. You can see that, once again, the pattern didn’t disappoint.
The irony of Levi’s stock making a “buttcrack” formation was not lost on me
By midday, LEVI was breaking back over the multi-day VWAP.
GROUNDHOG’S DAY, baby!
All of this just goes to show that even with a VERY short list of companies reporting earnings, we managed to find VWAP trading opportunities on a single stock!