Trading the Trend: NVDA & SOXL Review!
I just wanted to do a quick review on two trades that The Art of Trading caught last week and my process behind spotting and managing these trades! It will be an educational, detailed step by step review!
So far 2023 has been all about the emergence and adoption of AI technologies giving many AAA semiconductor stocks a BIG boost off of 2022 lows. Semiconductor stocks haven't just been showing relative strength on a day to day basis, they've been flexing this strength on a week to week and even a month to month basis. If you're an active trader taking note of this strength is incredibly important.
I actually talked about this point on a blog post from April 30th. Here's a snippet of that here:
Sticking with that theme my watchlist and trading ideas continue to be drawn to this sector, it only makes sense! Strong stocks leading the market higher on continued momentum!
The week of May 8th the Art of Trading "Top Pick of the Week" was $SOXL. It mostly chopped and churned and we ended up taking a small loss on it. On a positive note these setups remained quite bullish looking with a strong daily and weekly trend intact. Holding the 20 day MA's!
Coming into the week of May 15th semiconductor stocks remained quite bullish looking so I stuck to my gut feeling and picked $NVDA for the "Top Pick of the Week".
My technical thinking on the $NVDA Top Pick of the Week setup was basically this: It has been a clear cut relative strength leader in the sector. It was riding up against the 20 day MA in a trending fashion, coiling tightly for its next potential move higher!
Take a look at the Top Pick of the Week $NVDA setup here:
The entry as per the strategy was the opening tic Monday morning ($285.08) and the exit was the closing price Friday afternoon ($312.62)
This is how the setup and trade developed over the week. Trading the week up +9.66% after pushing off of and continuing the relative strength out of the 20 day MA and the tight coiling pattern! The resting phase from the previous week that allowed $NVDA to cool off a little, was ultimately what made this an ideal breakout candidate for that week!
Take a look at how the $NVDA trade developed in this chart here:
This takes us to our next trade. Noticing the relative strength early on, on Monday in $NVDA I thought the likelihood of a continuation move higher and for other names in the sector to follow was a good possibility. So, I alerted $SOXL long early on in the trading day Monday!
This is what the alert looked like here:
As the trade developed throughout the week I gave updates on the progression of the trade!
The trade continued to rally towards the $17 - $18 target. We made sure to book some profits on the way up! I alerted AoT members this:
We took the second 1/2 of the trade off later in that day as it started to tag the top side of our upper target! I alerted AoT members this:
Some Art of Trading private members who use options to trade the alerts were able to turn this trade into substantial bookable profits!
This is exactly what I like to see out of our strong community. Members who develop their skills and knowledge off of what they have learned from the Art of Trading and apply it to the skills and experience they have learned through trading themselves. It helps create confident individuals who can apply their abilities in a meaningful manner for years to come!
This is how you can turn big relative strength leaders in to real world winners!
I hope you enjoyed this educational post! Stay tuned for more!
Art of Trading