ZNGA Setup and Trade Plan

Today's Featured Trade Idea is ZNGA.  (Make sure you consider the Bearish overall market in the short-term and the fact that this is Friday, meaning we have weekend headline risk to handle.  However, if you can accept those things, perhaps leaning on the longer-term indices stall all being bullish, the a ZNGA long will be today's featured trade idea.)

Members can join us in Trading Room #1 as Rick reviews this 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.

Consider the overall market AND the fact this is Friday and we have weekend headline risk ahead of us. That said, our featured trade idea will be ZNGA.

ZNGA has been in a downtrend since the beginning of summer. However, the bulls are starting to move, printing a Morning Star type signal (off the 50sma) on Wednesday and following-through to break through the downtrend as well as a resistance level on Thursday.

I will look for even more confirmation with an Entry above Thursday's high. The initial Stop will be down at the bottom of the candle bodies from this week (which is also where a 10/1.5 Volatility Stop would place the Stop). Targets are set off longer-term chart Support/Resistance levels.

Trader Vision tells us we have about a month until the next earnings report. It also says that this chart setup offers 3 bullish conditions and 2 bearish conditions as well as plenty of liquidity.

TV20/20 tells us the trade plan offers a good Reward/Risk at the 1st Target (2.62:1) and if we need to sell the entire position at Target #1 we will achieve our Trade Goal. However, if we can sell half there (to lock in profit) and hold the rest up to the 2nd Target, we can make a 3.88:1 Reward/Risk ($558/$144).

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 ZNGA Trade Setup - As of 10-4-18

ZNGA Chart Setup as of 10-4-18

The Trade Plan

ZNGA Trade Plan for 10-5-18

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...



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



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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