Hubert Senters here.
Let’s take a look at Chipotle. Salmonella is what I call it. So this is a perfect example of why you need to make sure that you have a rule set and plan and follow it to the T if you can. Now, in previous videos the week I was talking about ‘’Chipotle looks pretty good.’’ You know and I kind of make fun of it just because the situation that they go through. It’s not funny or anything but it’s comical.
But what we’re looking here is at this right here. There is that gap that they have associated with them most recently. And it’s a good gap form instead of a bad gap. And there is the bottom so there’s the high and there’s the low. Now, if you’re setting you’re going okay, looks like a valid uptrend. Maybe a lot of bad news behind them they’re going to figure out how to do the stuff that makes people sick. That would be awesome.
If you’re doing a trade above the high. I’m not being super record here I’m trying to be though a trade above you would have had a trade above right there. See it? These trades or above the $526. If you have in order to get long after this gap up. Now, if you have and you could got long here and obviously you would’ve took a stop-loss. You’re not going to get along at $526-ish and hold onto it watch trading at $501. I hope you don’t do stuff like that.
So if you did that that would cost you. Here’s the other flip side of that coin. The blade has two edges, double edged source. If you’re waiting for a close above you would have not got a feel but you may have to wait for it to close up here at the $530 so you cost yourself a little bit.
So in this case scenario a trade below or close below the actual right trade in this example on this after earnings gap would be a short because it closed below $504. It’s about two in about a minute or so and then the target would be half a gap fill or full gap fill. Very important that you know your trading plan and you pay attention to the details of your trading plan so that you don’t get hurt to protect yourself at all times.
Good luck. Hope it helps. And I’ll see you on the next video.
Hubert.
