Price Action Case Studies 5/28

Clean Price Action results in a superior move and why one should pay attention to them despite market noise. 

Salesforce: Damaged Chart
When you see too many holes in the chart, the best thing to do is avoid it.
When in doubt, stay out

Salesforce CRM came out with a strong earnings report and a bullish outlook.

Salesforce stock today got my attention due to a 6% move after an analyst upgraded the stock but if you look at the big picture, you don’t get any clarity. The stock has underperformed since September 2020 and traded in a band between 200 and 280 with no clear trend. Price action traders love to trade clean charts that we cannot see here. Hence let’s avoid the stock. 

Roblox – Late in recognizing the potential

The most difficult trades are the ones that you recognize but fail to pull the trigger at the right time. An IPO with a solid business building a bullish base was an open invitation to buy but the market condition prevented from doing the trade and now there is nothing left but regret.

Robox like stock always reminds us of the importance of trading a solid clean chart. ROBLOX stock is up 46% this month alone from the base of 65. 

Upstart Holdings UPST – The Support and Resistance matters

There is a saying: Buy at support and sell at resistance, and this chart is a great example of that. 

UPST was at Gap horizontal support of 81 and the market was in a bad shape but then the stock and the market made a comeback and the stock literally doubled in value :(. Unfortunately, I could not muster the courage to believe in this stock. What matters – the price action was clean and it worked.

Lots of subscribers here understand these concepts and pick up such ideas on their own and Congratulations if you did so

Why I am sharing all these charts?

One of the primary objectives of the blog is to educate price action concepts. Lots of times we can learn by looking back and analyzing opportunities that we missed.

Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers