$BBBY Pre Market Short Set Up- Video and Transcript
Turbo Trading's Head Trader Robert Knight, MBA talks about a chart pattern he finds to be successful 85 to 90% of the time. He uses stock $BBBY from November 3, 2021, as an example. A transcript is below the video.
When we're trading stocks using chart patterns, we're looking for patterns that are around 70%, predictable for us. You, you just never know. They're never a hundred percent predictable. But if we can win on 70% of our trades would be a great win rate. And because you, you let profits run and you cut losses short.
So even though 30% is a loss, it's only a small loss versus a small win or a big win on the other side. So you should be able to grow your account, but this is a pattern that I'm going to show you here on $BBBY that is probably 85/90% successful. Every time I've seen it, it just always seems to work.
A buy-side or an uptrending chart. By type a trading room. We're not, we're not short bias. We're long-biased. That was what I was trying to say. So we don't normally take these trades, but what we do, do with them as we don't buy the stock, but you could very well short them. Now, this is $BBBY. And this sold off very sharpen. I think it was earnings came down.
This was one of those wall street bets, meme stocks when it ran here up to $50 from $15, but this morning or after hours, it must've had some kind of meme push on it. Cause I saw the $GEM was up $AMC, $EXPR all those meme stocks all had a pop and this one was no different. Last night you can see it closed and away it went. Doubled pretty much from, you know, $16 to $31, but then it got into this downtrending channel.
And this is the pattern that is 85/90% successful. They pop up and then they get into this pattern like this, where we just draw the lines, you know, parallel lines, nothing special with it and right near the opening. What you're looking for is the stock to pop up close to this channel line, or even at the opening, if it's down a bit, if it pops up to the top of this channel line, that's where you're short the stock
And sure enough, you can see in the stock here, it is in this downtrending channel. And then at the opening, it just gets absolutely slammed and continues to sell-off. Now, they don't continue to go down forever. Sometimes what will happen is they’ll get down here, then they'll actually go and, then trade back to the high of the day.
But this here pattern, this is, and you can just hold these and let them sell-off. I mean, this is a $7 move from this. Pop-up here to $26.75 from $19.50. That's you know, it's an $8 move. That would have been a great short. And as a matter of fact, Tyler had, suggested going short the stock at the opening on it.
He was very bearish. He did, he was short, I think, around $25. And you could cover down here at $20, so they had a nice $5 move, but this is the pattern to recognize. For sure you don't want to be buying the stock. And if you're, if you're short bias, then you want to short the stock on any pops to the, up to either to the trendline or even up to resistance at which would have been up this level here $28.
You could even short it at that level and then have it come off. But in this case, it just got back up to the trend line.
