Top Opp. Dissected – $NKTX

Yesterday we saw one of the best capitulation trades I’ve seen in a while with $NKTX.


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This was an A+ capitulation setup in my book. Here’s why:

  • Intraday prices were highly extended – RSI was 94.87 at the peak
  • Volume accelerated dramatically on the ramp higher with each volume bar higher than the last until the crescendo vol top blowoff
    • Average volume per 2 min bar before the run was around 50-60k, at the peak it was 24x that amount, hitting 1.2 million
  • Price accelerated with volume, creating wider bars while getting very steep
  • It gave us an excellent entry after heavily rejecting over $10, giving us a entry around $9.50 with a stop over highs at $10.30.
  • Went 15 bars without breaking prior bar low
  • It was a massive move on the daily – roughly 4 ATRs with 3 of those ATRs happening in 20 mins as it peaked. Not a sustainable move

In the daily below, you can see how much of an outsized move it was. Which is fine, stocks can do that and sustain. The difference is how fast it happens. The quicker price accelerates away from VWAP the higher the probability of a deep pullback and this is where we look to capitalize.

As far as trade management goes, you should be looking at VWAP as one of your main targets. However, taking profits along the way is fine too. I like to take some off at the 10d EMA, VWAP and then leave a trailer on in case we get a full reversal.

When these plays happen you have to be quick to act when it’s time. This is a high probability setup with excellent Expected Value that can yield fast results.