$BALL Top Opportunity Dissected

Today was packed with action including a handful of parabolic mean reversion trades. $BALL was the standout with a complete reversal and clean price action.

Of course it hit the scans minutes after I stepped off the desk for lunch so I didn’t get to trade it, but other members in the room were able to capitalize.

Below I break down the trade, what I liked, what could of made it better and best practices for managing it.

Here is what I liked and what made it a stand out opp:

  • Dramatic move lower – candle bars were massive and the speed of the move (ROC) was fantastic
  • Huge spike in volume – went from trading around 5-10k shares per 1 min candle to 70k on the spikes, over 7x
  • No fresh news, it had earnings this morning but this move was a seller later in the morning that was dumping shares
  • The move was substantial when looking at the daily, ATR was one before today so that was a 3.5 ATR move

Couple things that could of made the setup a little better:

  • No volume capitulation on the reversal candle – what looks like happened is a seller came in dumped a lot of shares then left and buyers brought it back up gradually, which is fine, but ideally a big volume capitulation candle is a dead give away the turn is coming
  • Would have like to see more acceleration on the last couple candles before the turn

Other than that, this was a great setup and one you should archive and study. These are high probability setups that can offer excellent RR.

As far as trade management goes it’s important to wait for the backside to set in. Trying to catch the bottom on the frontside can be disastrous and is really hard to manage risk. Wait for the turn, hit the Ask and trim into the the profit zones – 10d EMA and VWAP as I mentioned in the notes on the chart.

Have question? Feel free to DM me on Twitter or email us here at support@fusionelitetrading.com.

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