This content details a successful day trading strategy, specifically focusing on an "opening range breakdown" setup, applied to the stock Tiffany (TIF) following disappointing earnings guidance.
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hey guys Brian from bear ball traders
Friday March 16th just wanted to go over
trade I did in the room this morning
Tiffany came up with some earnings that
disappointed I guess guidance maybe not
so much the earnings themselves but
those forward guidance so it all started
with looking at the daily and really
liked the daily set up on this for a
short you can see here it consolidated
nicely and arranged through February and
the day prior Thursday had a nice day up
and and that's sort of one of the things
I'd like to see for an opening range
breakdown set up had decent volume on
this on yesterday too so you know he had
a lot of traders in there that thought
that the I guess they thought the stock
was gonna gap up on earnings if they
knew the earnings was gonna be announced
next day so you know the psychology of
all the people that bought in thinking
they were gonna you know come in and
find the stock higher and then they find
it lower you know disappointment fear of
losing money so they were probably
pretty ready to bail so and the only
other thing I like about this is the is
this level of gap down it wasn't huge it
was only 5% and that's a sweet spot for
me sort of five six seven percent gap
down is a nice range I don't like seeing
a stock gapping down 12 or 15 percent
kind of feel like Ola the bad news might
be priced in so you know this five six
percent 7 percent gap down level is a
nice level to look at an opening range
break down as well so daily setup was
nice up updated prior day and gapped
down and into a nice 5 6 percent range
so let's see mechanics how that all
happened this is the one-minute chart
it's a pretty funky pre market action I
think the stock went below 95 at one
point and then you just prior to the
market open you can kind of see it ran
up you know which wasn't you know great
so market opened and then you know we
had that first volatile one minute
candle and then that's the second one
you know you don't trade at the very
open you can want to see you want to see
this thing set up that's why it's called
an opening range breakdown and that will
happen probably within the first five
minutes I would say it could be a little
bit longer but you know you need to set
a little and a couple minutes go by
before things settles out and you get
some direction and you're looking for
this thing not to break the high so he
it's stablished a high they're low
they're again like I said it was all
over the place didn't didn't break this
high didn't break the high here and now
you're making a lower high so you know
here's your sort of level of support and
it's close to this this level here so
Sooners it's gonna break this sort of 98
range kind of figured it was gonna go
down so I took my short somewhere around
ninety eight ten I believe it's what I
got to fill that so I'm gonna continue
down from there and you know my premium
my target was somewhere around ninety
five based on pre market action and I
did take some off on the way down and
you know covered the rest under 196 I
believe so that was a an opening range
breakdown pretty a pretty reliable trade
I mean you know my stop here would have
been you know over back up over here if
it had broken back above this level but
never did once it broke this this level
here so anyway yeah that's that's my
trade on Tiffany and I did do another
trade on it I did it long reason I did
went long and I can't see it on this
chart but it consolidated in this range
for quite a while and then I remember
kind of the pre market action house
people seemed to be wanting to buy it
you know down around
these levels and it actually
consolidated and then broke higher so as
soon as it broke out of this
consolidation range again it's all about
levels of support and resistance so as
soon as it broke that resistance range
it went up I think it went over 99 it
had a nice run back up
so maybe trapping you know people that
were short here maybe some people
thought it was maybe gonna trend lower
and some short covering started to
happen and some of these people that
want a Dolan at the lower price came in
and started buying it so I caught it on
the downside and I caught it on the
upside so it was a good day overall for
me like that Tiffany trade love the
opening range breakdown trade it's
pretty reliable trade so guys have a
good weekend Friday we'll see everyone
in the room if you join us bearable
traders chat room see you on Monday
morning have a good weekend guys bye for now
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