PZZA Setup and Trade Plan

Today's Featured Trade Idea is PZZA.

Members can join us in Trading Room #1 as Rick reviews the PZZA setup and other Trade-Ideas at 9:10am Eastern.  For now, here are my own analysis and a potential trade plan made using our Trader Vision 20/20 software.

PZZA was in a long-term downtrend. However, in August, the Bulls stepped back in and have been forming higher-highs and higher-lows for a month or so. In early September, it also broke into a Rounded Bottom Breakout pattern only to promptly take profit on a slight pullback. Over the last 3 days, the bulls have stepped back in, holding the recent trend and breaking back up through the 50sma and a resistance level.

I will look for a positive trade Entry with a Stop tight below the most recent pullback candle bodies (possibly protected by the 50sma and the level just broken). Targets were chosen off a long-term chart (8-days) and the 2nd of these should be at the 200sma when we get there.

Trader Vision shows us that earnings are out of the way and we have a couple months until the next round. It also shows us that this setup has 4 Bullish Conditions versus 2 Bearish Conditions (Long-Term bias of PZZA has not turned Bullish yet and Short-term market pullback).  Still, this is an attractive setup.

TV20/20 then tells us that this Trade Plan offers us over 2.5:1 Reward/Risk at the 1st Target price. In addition, it tells us that if we had to sell the entire position at that 1st Target, we would achieve our Goal profit for the trade. However, if we can sell half at that 1st Target and hold the remainder until the 2nd Target, we would achieve a 3.7:1 ($517.50/$140) Reward/Risk for an overall profit of 11%.

Having this knowledge before a trade is even entered makes it much easier to control emotions and maintain discipline.

Below is my markup of the chart and the trade plan as laid out by Trader Vision 20/20.  As a bonus, if you click the green button below, you'll be able to watch a video of the chart markup and trade planning process.

The PZZA Trade Setup - As of 9-11-18

PZZA Chart Setup as of 9-11-18

The Trade Plan

PZZA Trade Plan for 9-12-18

Note how Trader Vision 20/20 does so much of the work for you.  Knowing the ratio of Bullish Conditions to Bearish ones as well as the overall risk of the position size, risk to Stop out and the Reward possible at each Target price can help a great deal with controlling our emotions.  Knowing the dollar impact of every scenario ahead of time, allows us to make calm decisions during the trade.  It really takes the pressure off.  No guesswork.  No surprises.  No emotional roller coaster.

To see a short video of this trade's chart markup and trade planning, click the button below.

 

Put the power to Trader Vision 20/20 to work for you...

 


Testimonial

Trader Vision immediately simplified the process...immediately it provided that information and guidance to me. I knew what I would risk for how much reward, I began taking trades off at the 1st target, 2nd target, I was no longer holding all my trades for the homerun. I also began implementing the stop losses if and when they were reached, not just hoping the stock would recover.  It then became easier to see what patterns were working for me and which were not.  It provided a much more relaxed and stress-free environment. -Joan G

 

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Investing and Trading involve significant financial risk and are not suitable for everyone. Ed Carter is not a licensed financial adviser nor does he offer trade recommendations or investment advice to anyone. No communication from Hit and Run Candlesticks Inc. is to be considered financial or trading advice. All information is intended for Educational Purposes Only. Terms of Service.

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