$500 Account Follow Along Day 5 | Is PLTR A Bull Trap?

Today is day 5 of our $500 Account Follow Along. $HOOD took a little dip on us, but turned out okay. PLTR had some news this week, but is it a bull trap? We also entered $UA today!

June 1, 2024
Meta Matt
Check Out Our Breakdown On $HOOD, $UA and $PLTR

Welcome to day 5 of my $500 Account Follow Along! Be sure to check out the past entries:

Day 1 : Building a Watchlist and explaining the strategy
Day 2 : $PLTR Trade Idea
Day 3: Buying $HOOD
Day 4: Up 5% on $HOOD

Not Worried About $HOOD 6% Dip

Let's talk about our recent entry into HOOD at $20.90 two days ago. We were up as much as 6% yesterday, but today $HOOD had a drop, falling 6% in one 4H candle alone, closing down -4.30% on the day. We had some members in the discord who were asking if it was time to worry, our answer was no, and here's why:

Stop Loss: Our stop loss is set at $19.59. This means if the price dips below $19.59, we'll be exiting the trade. If it doesn't, then we simply don't worry as this is a swing trade, and we used position size management and a stop loss to make sure we are limiting our risk even if we do stop out. A stop loss triggered doesn't necessarily mean the trade was wrong. It's a risk management tool to limit potential losses. That being said $19.07 is a key support level. For those who are long term bullish on $HOOD, we would personally be keeping our bullish overall thesis even if the stock goes below our $19.59 stop loss. As long as the price stays above $19.07 we can still have bullish sentiment, however if the price falls below that and it turns into resistance, then $HOOD has a long ways down to go from there. The reason that our stop loss is at $19.59 and not $19.07 is due to our Risk:Reward. We are using a $500 Account, so posistion size position is so important for these trades, which is why we have our stop loss where it is to make sure we aren't risking too much of our portfolio in one trade. Interested In Having Jay As A Trading Coach So That He Can Teach You This Strategy? Click Here!!

If the stop loss gets hit we will reassess the stock, remember this DOES NOT mean that we will immediately find another setup for $HOOD if a good one doesn't present itself as we have no interest in revenge trading.

We Update All These Plays In Real Time On Our Discord

Market Context: The broader market has been experiencing some volatility recently, and HOOD has been following suit. We've already seen some decent drops (16% and 10%) on $HOOD during the recent drawdowns that were part of this overall uptrend on the Weekly Chart. The current swing low sits at $19.07, and we're still above that level.

We Had A Few Drawdowns, However We Are Still Making Higher Highs And Higher Lows

Our Outlook:

We believe $HOOD is more likely to reach our target price than hit the stop loss with the current set up. If the price does fall below $19.07 though, it could continue down significantly. In that case, we'll need to reassess the situation and determine the best course of action. This doesn't mean just jumping back in for a revenge trade!

Remember, sticking to your trading plan and risk management strategies is key. Short-term volatility doesn't necessarily negate a long-term bullish thesis. We'll continue to monitor HOOD and keep you updated on any developments. As always, this is for informational purposes only and should not be considered financial advice.

Holding Off on $PLTR (For Now)

Compared to HOOD, we're less confident in PLTR's current upward momentum.

Visible Range Volume Profile: This technical indicator suggests PLTR could easily fall back down, check out the video below to see why!

Diversification Strategy: Entering a long position in PLTR now would mean having two trades reliant on a rising market ($HOOD as well). We prefer diversification that's not solely dependent on overall market movement.

PLTR's Sideways Trend: PLTR has been consolidating sideways for a significant period (16 weeks, 4 months).

Entry Levels for PLTR: Our level of interest for entering PLTR long is $17.25. That being said the $13.56 level that in May 2021 wasa support turned resistance level (hasn't been tested as a level much). If we dip past our $17.25 level we could see the price go as low as $13.56 before turning around. That is why we are waiting for a 4H candle close above $17.25 to enter. There's a possibility of strong buying pressure at both support level due to previous buying activity.

PLTR's Long-Term Potential: It's important to remember PLTR is still up significantly (260%) from its lows, so has some room to come down.

The Takeaway: We're being cautious with PLTR due to the lower confidence in its uptrend and the potential for a correction that could impact other trades. We'll wait for a better entry point, potentially around the May 2021 support level, before considering a long position in PLTR.

$UA Trade Idea

We had a bullish week, so could look to buy into the continuation. This is a risky play, but we are looking to enter at current price level ($6.94) with targets at $8.6 and $10.56, and a stop loss at $6.17. We are looking to risk 6 1/2 shares with a $500 Account, to limit risk (if your broker allows you to do fractional shares).

I entered this trade today at $6.94, buying 6 shares.

Where We Are At With The Account

Interested In Having Jay As A Trading Coach So That He Can Teach You This Strategy? Click Here!!

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