LUCKIN COFFEE ($LK): The Trend Said to Sell Way Before Delisting
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Luckin Coffee looks like it is going to zero. Even if it does recover, US investors likely won't benefit since it is being delisted from the NASDAQ. Further, even if it wasn't being delisted, it probably would be soon given the new legislation being past which will result in stocks like this being delisted. Here is the thing though, you didn't need to know any of this to know LK was a strong sell well before the drop. Any decent trend indicator would have told you to get out of LK. Not only that, those same indicators would have had you potentially short into that big drop. Let's take a look at how one would have faired being strength and selling weakness on LK to get a sense of why it is so important to trade with the trend.
Resource: thecolgatemaroonnews.com/23640/commentary/luckin-coffee-runs-out-of-luck/ + foxbusiness.com/markets/senate-passes-bill-delisting-rogue-chinese-companies
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1. With our Fractal Trend indicator we ONLY take long setups when the trend is bullish (Aqua bar color) and ONLY take short setups when the trend is bearish (Maroon bar color).
2. Since the only options during a downtrend are to take short positions or sit in cash, we can see that traders and investors using Fractal Trend would have either been in cash or have been short for the big drop.
3. Likewise, since only long positions are allowed in an uptrend, traders and investors would have had a chance to capture a portion of the upside when Luckin did run.
4. With the last two points in mind, you can see that adding another indicator can greatly increase our ability to profit during both up and downtrends. For example on the chart, we are using S/R levels and orderblocks to find entries and exits for trades along the trend.
5. As you can see on our chart, not every pure trend based play (one opened at the color change and closed at the next) was profitable, and for sure not every more tactical trade with the S/R levels and blocks was either, but importantly the profitable plays and the money saved helped one to profit, and more importantly protect capital, far beyond what a buy and hold investor would have
Long story short, LK is a great example of the power of trend trading and shows the value of buying strength and selling weakness as compared to buy and hold.
Like, Comment & Follow to help the community grow 🎉🎉
---
Luckin Coffee looks like it is going to zero. Even if it does recover, US investors likely won't benefit since it is being delisted from the NASDAQ. Further, even if it wasn't being delisted, it probably would be soon given the new legislation being past which will result in stocks like this being delisted. Here is the thing though, you didn't need to know any of this to know LK was a strong sell well before the drop. Any decent trend indicator would have told you to get out of LK. Not only that, those same indicators would have had you potentially short into that big drop. Let's take a look at how one would have faired being strength and selling weakness on LK to get a sense of why it is so important to trade with the trend.
Resource: thecolgatemaroonnews.com/23640/commentary/luckin-coffee-runs-out-of-luck/ + foxbusiness.com/markets/senate-passes-bill-delisting-rogue-chinese-companies
---
1. With our Fractal Trend indicator we ONLY take long setups when the trend is bullish (Aqua bar color) and ONLY take short setups when the trend is bearish (Maroon bar color).
2. Since the only options during a downtrend are to take short positions or sit in cash, we can see that traders and investors using Fractal Trend would have either been in cash or have been short for the big drop.
3. Likewise, since only long positions are allowed in an uptrend, traders and investors would have had a chance to capture a portion of the upside when Luckin did run.
4. With the last two points in mind, you can see that adding another indicator can greatly increase our ability to profit during both up and downtrends. For example on the chart, we are using S/R levels and orderblocks to find entries and exits for trades along the trend.
5. As you can see on our chart, not every pure trend based play (one opened at the color change and closed at the next) was profitable, and for sure not every more tactical trade with the S/R levels and blocks was either, but importantly the profitable plays and the money saved helped one to profit, and more importantly protect capital, far beyond what a buy and hold investor would have
Long story short, LK is a great example of the power of trend trading and shows the value of buying strength and selling weakness as compared to buy and hold.
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