Trade Journal: Long $AHPI - Quiet and Tight Setup - 4/8/2020
Updated
AHPI has been a hot stock recently due to it's benefit from the COVID-19 pandemic. AHPI produces ventilators which is obviously in high demand right now. Late Feburary, AHPI broke out but could not upkeep this powerful up move and instead consolidated sideways since then. This is very common for low float stocks such as AHPI.
What impresses me the most during this consolidation is how volume is literally drying up. Today we had a small range day with the lowest amount of daily volume during this consolidation. What follows the low volume day is usually a high volume up day as investors are caught off guard by the sudden price change and start chase the stock up. This is called a Quiet and Tight setup. An example of this setup can be seen on March 18th as a very small range/low volume day was followed by two high volume up days where AHPI went from 14 to a high of 28.
Since I consider low float stocks risky, I am using 1/3rd size on this trade. The R:R on this trade is very favorable (10.5) therefore I feel comfortable risking less on this trade in case we get a large gap down.
Entry - 16.99
Stop loss - 15.95
Target - 28 to 38
What impresses me the most during this consolidation is how volume is literally drying up. Today we had a small range day with the lowest amount of daily volume during this consolidation. What follows the low volume day is usually a high volume up day as investors are caught off guard by the sudden price change and start chase the stock up. This is called a Quiet and Tight setup. An example of this setup can be seen on March 18th as a very small range/low volume day was followed by two high volume up days where AHPI went from 14 to a high of 28.
Since I consider low float stocks risky, I am using 1/3rd size on this trade. The R:R on this trade is very favorable (10.5) therefore I feel comfortable risking less on this trade in case we get a large gap down.
Entry - 16.99
Stop loss - 15.95
Target - 28 to 38
Trade closed: stop reached
Stopped out yesterday on this trade. Although there was good action in CODX and LAKE yesterday, the action did not rollover to AHPI unfortunately.
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