Rippy time.
Daily Plan 12.11.24
Hey traders-
Pretty rough day to trade. Our main expectation was to see 6149 as resistance for a move down into 6100.
We did not trade 6149, missed it by a few inches but did trade all the way down into 6100s. Very slow auction, not really very trade-able.
The benefit of having a written plan like this is that atleast I am not buying calls at the open only to see them go to 0 a few hours later.
If you are super new to the publication, I want to set some expectations straight. You want to get comfortable for first couple months to get to understand the cadence rather than just jump into this trade and that trade without first understanding the basics.
The way I see the stock themes shared here is almost always longer term, over a time frame of 1 year or even more, where I expect these stocks to double or even more. We have shared stocks here which have doubled, tripled, they have gone up 15X in a year or two years time frame. Our folks can attest to it.
Every stock that I list in my plan comes with a Line in Sand or LIS. So for instance, a PLTR at 6 dollars or more recently a MARA at 24 dollars. So this can be thought of as a mental stop loss. If I am bullish on MARA at 24 and the stock jumps to 30-32, I will move my Line in sand by a point or two. Normally for any stock theme, I am willing to risk 20-30% but usually not more than that, unless I have a strong fundamental basis for it. If a stock falls 20-30% below my Line in sand, I will think of my bullish thesis as voided in that tie frame, and in this case I will wait for the stock to retake my Line in sand for my bullish bias to return. In this case, it is possible that I get stopped out or get stopped out a couple of times even. Now it is a different story that most of our stocks shared here do not fall 20-30% below my Line in sand and just take off. But this in no way means that they cannot. Even if I have several such losers, you can see that they more than make up in names like MSTR, DOGE, Bitcoin, CVNA, MARA, PLTR, TSLA, UNFI, SMCI and hundreds more shared here in last year or so.
At end of the day, the goal of any trader is to beat the benchmark. The benchmark over last 100 years is returning 9% including inflation rate. So if you are beating this by 1%, 2%, year after year you are already a trading super star. Are you able to return 20%? You are a market God or Goddess!
The challenge arises when we want to return a 100%, a 200%- every week. This becomes harder and harder as your account grows. Personally, I am aware of traders who claim they have made 30-50% or more from these ideas. I am myself not aware of any trader making a 100% a week on any consistent basis.
Now while I myself see a 20-30% stop loss on any stock idea as reasonable, my philosophy on futures and options is extremely different.
In options, I expect every single option I share to go to 0. Now it is a different conversation that many of them do not. For instance, our most recent option PUT in CVNA just doubled.
With futures, my view is I see futures, as means of generating daily and monthly income. I do not see them as an investment or anything longer time frame than from a few minutes to hours to may be a few days. In futures, I see myself place several trades, take some risk and hopefully in return I generate a positive daily return after fees and commissions. Hope that makes sense.
While I see stocks (long term holding) virtually for anyone and every one, and options for a few more, I personally believe futures should be traded only by seasoned and experienced traders who can manage risk extremely well. Due to leverage, things can turn south very fast in a product like futures.
Now in stocks, you may say if we have conviction then why take the L at 20-30% at all?
I do not subscribe to this mindset either. Remember there have been periods in history when stocks sold off 50% or more. Well there have been times when the stocks sold off by 90% and would not claim their previous high watermark for another 15 years. So if you do not believe in ever taking the L, then know that you could be stuck with dead money for several years, if not decades. When you say you will never take the L, you are essentially saying you know the future, you know all the “unknown- unknowns”. Do you really think that you know the future? Is it know-able?
I really doubt so.
I will cover this in more detail in my upcoming weekly post for subscribers but for now I briefly wanted to touch upon this concept for our new readers- to set the expectation and what you can, and should not expect from this blog. The bottom-line is this is not a get rich quick scheme. This is a platform for those who want to learn and understand trading at a fundamental and basis level.
GOOG
Alphabet shook the market with its new announcement about the Willow. This creates a new unknown in Google which was not there only a couple days ago (well unless you are an insider).
This I think could support the stock right here below the gap near 178. It is 186 now.
I expect GOOG to push higher into 200 if 178 holds. I think January MOPEX $190 CALLS on GOOG at 3 dollars appear attractive to me personally.
TSLA
Another day, another high in TSLA. We shared this with our subscribers way back when it was below 105. It is 400 now. We cannot be bear on TSLA above 390, I think this is headed higher into 450s. Think of it this way, there is much money sloshing around in dark crypto market. The market itself is now around 3 trillion dollars. Why can’t some of this money flow into TSLA and make it a 1.5 trillion dollar stock?
Levels
My key level on the day tomorrow will be 6103-6107.
Scenario 1: If the level holds, we could be headed higher into 6149.
Scenario 2: If we break the level, the next strong support could be on my weekly level. Please refer to my weekly post for the support level. At any rate I do not think we find many takers below my weekly level.
~ toc
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