So its premarket 8 AM market time, you have your list of gappers and their headlines.
Now how exactly do you turn that into an actionable trading watchlist? I will walk you through
how to do that in a 3 step simple process.
How to create a premarket watchlist and trading plan? And no, your watchlist shouldnt be just
a ticker, and a headline, and you shouldnt just follow chat room alerts to buy the morning
break out on every single stock with a news title.
For beginners trading with a small account, If you just focus on created your trading
plan that’s suitable for your own style, and trade your plan, that will help you eliminate
any fomo, breaking rules, and not following your risk.
And if its too much work, well maybe just go back to chasing chat room alerts then.
I heard they are making it rain lambos these days.
This is a part 2 video to the my how to create a premarket watchlist. In the last video,
I talked about step 1, which is finding the gap ups and gap downs that can potentally
give us even more follow through. And step two, which is finding valid news headlines
and analyze whether the news is positive, negative, or a blatant pump.
like I mentioned in the last video, just because the news seems positive, doesn't mean it’ll
go to the moon, and just because a news is obviously bs and fluff, doesn't mean the stock
cannot rip and run for 100-200% still.
In this video, we will be going over the next 3 steps of creating a detailed premarket watchlist.
If you appreciate videos like these, please remember to smash the like button for youtube
algorithm.
So after you’ve completed step1, finding a list of potential gappers, and step 2 found
their respective news headlines, the third step is to chart out the stock’s support
and resistance lines on the daily chart.
Lets take a look at CLVS, a recent small cap biotech that’s been very hot lately. So
after identifying all the recent news on the stock. We can see that it had reported great
Q3 earnings on Nov 7, upgraded by Zacks, and rumors of a potential merger and acquisition
deal.
So now we know fundamentally, there is news to justify this gap up and potential continuation
to the upside. And the stock isn't just up on air, or running on fluff news, or even
worse, no news, which could put you in potential risk of a T-12 halt by the Nasdaq.
So if we’re looking at this stock premarket on Nov 29, it’s gapped up to above the highs
the day before, which is Wednesday Nov 27 around $12.60’s.
But before we are zoomed into intraday levels we want analyze the chart on the daily first,
before anything else. So on the daily, you can see that $12.60 correspond with a daily
support level on the chart. Remember my “how to draw suppor tand resistance video”.
These areas where there is above average volume, these major dips like a U shape that stand
out, that shows that these are price levels of interest. And furthermore, if you draw
a line on that prce 12.60’s/ you can see that line has touched more than 3 candle areas.
These price levels act as psychological support and resistance. You can see it used to be
support for this stock bounced off once and twice here, once that level is broken down
and the stock tanks lower, that previous support becomes resistance.
So that's the gist of how you draw support and resistance and major levels of interest
on the daily. So CLVS, you can see if we break above the 12.6 resistance successfully, the
that should become new support on the daily.
And the next resistance level, is $15.5. And after that possible 16.50’s. These are all
just basic technical analysis on a stock.
Like i’ve said in this vidoe, how to let winners run in day trading by utilizing the
dailuy chart. Drawing out key daily resistance like this around 16.50, 18.1, and 19.5.
Does not mean the stock will run that high, but with enough hype, momentum and buying
volume, it could!
Nothing is guaranteed 100% in day trading. I dont care what all these day trading marketing
tell you, there is no guaranteed lambo handout, and there is no secret sauce that’ll make
you six figures in 5 minutes.
The only thing that’ll guarantee u 100% success rate, is if you destroy the like button
at the bottom of this video to go long on this channel. We have grown from 0 to now
over 25,000 subscribers in less than 12 months. Somebody do the math here, I think thats like
10,000% ROI in a year. Thank you guys so much for ur support. And no, there is no short
locates available on this channel.
So after you’ve drawn out the important support and resistance lines on the daily
chart, The fourth step is looking at key data on the stock. That includes the float, market
cap, financial metrics, and SEC filings. This step isn’t as important if you were trading
mid cap and large caps like Facebook Roku or Tesla.
But this is crucial if you are trading penny stocks with a small account. Like I talked
about in this video. You cannot just blindly buy every single stock gapper that has news.
So let’s continue using CLVS as an example and look at this stock’s key data. And by
the way I’m using the data, charts and price levels on this stock as of November 30, because
I cannot see the future, I know some traders claim they can do that. But im not a wizard,
harry.
So we can see that CLVS float is 50.7 million, so it's not a flow float squeezer that’ll
run 200-300% in 10 minutes. The market cap is 800M so it’s still considered a small
cap stock but not a micro cap penny stock like $CGIX or $APDN
. But since the market cap for CLVS is more substantial ,that means there can be some
actual institutions investing or trading this stock, rather than mostly retail like the
other penny stocks.
So thats something important to make note of when creating your watchlist. Like i’ve
mentioned in my various trader psychology videos, You want to know what kind of traders
and whether its dumb money or smart money you are trading against.
The next step is looking into SEC filings for the stock. Now the key factor to make
note of is that CLVS is a biotech company, if you’ve seen my SEC filings videos, you
know that these biotech companies are almost always poor for cash, that is more so for
micro cap companies like we’ve talked about before like PSTV and APDN. so it's important
to see if they have any active S-1 or S-3 to issue an offering.
So the fifth step is the most important but often the hardest step, which is putting all
the data you have collected from step 1 to 4 together, and using your past screen time
experience and your current market sentiment to plan out the most likely scenario short
term.
We’re day traders, so most likely we are looking at intraday time frames and making
educated guesses on what the stock could do to the upside or downside.
So CLVS, yes it was a gapper on the list, step 1 check. Does it have valid news published
in respectful sites, yes it does. Step three, drawing out the key daily resistance of where
the stock could likely go to if there is momentum and volume. And the support levels of where
the stock can dip and consolidate to for the next leg up.
Step 4, the stock is not a low float, its a small but not a sketchy penny stock. It
has a bigger market cap so there could be funds and other institutions playing it. Its
a biotech with an acitve shelf registration so they could, try to raise money sometime
soon. But it doesnt mean they will right away, they can do that tmr, next week or next month.
CLVS is a very hyped up biotech stock recently and on the daily chart is going parabolic
and breaking out above all key resistance levels. If if you know anything about trading,
do not fight the trend, especially when the smart money is involved.
Now looking at the past behaviors of how the stock has traded intraday, you can see that
the stock likes to push fast in the morning and quickly pull back. SOmetimes it even sells
off first and go red on the day, before consolidation and volumes comes back. And the stock goes
red to green and then rip even higher on a break out.
So thats why on Nov 26, instead of buying the high of day breakout on CLVS. i made the
plan to short the retest of prior highs early in the morning and covering into every single
wash off. Because of the screen time ive spent observing the trading behavior of this stock.
Then once the sell off slows down, we can look to long the curl potentially. if there
is some consolidation and above average buying volume coming in, we could see the stock go
red to green and break out to new highs the previous day.
And all these price levels are determined premarket using the daily support and resistance
levels, previous day close, and sometimes the pre market highs and lows as weaker levels.
And i repeat the steps 1 to 5 for all the four to six stocks I have on watch every single
morning, from around 4am pacific time to 6am. I’ve become really fast now and each stock
usually takes me about 5-10 min. Sometimes even longer if we have penny stocks that have
really dirty SEC filings like CGIX and APDN.
Everyone has different process of creating watchlist, but I know for sure that finding
a stock with a headline definitely isn’t enough. I’m just sharing my premarket watchlist
planning routine and what has worked really well for myself.
If you have a different process of creating watchlists, feel free to let me know below.
As always this detailed video took 10-12 hours to make. So i’d really appreciate it if
you tap that like button and subscribe if u want to see more like this in the future.