$TSCO, Tractor Supply Company

Trade Date: 04/11/17

$TSCO made headlines this morning after announcing a warning to its shareholders that its first quarter performance does not look good. This announcement comes ahead of its earnings which will be on April 26th, a date definitely worth keeping on your calendar. Are they announcing it early to avoid a bigger crash on the 26th?

Trade Style: Day Trade

Position Bias: Bearish

Technical Criteria

  • Price Change: - $ 3.47 and -4.92%
  • Premarket Volume: 36,270  shares
  • Daily Average Volume: 2.11million shares
  • Average True Range: $1.35

Entry Price & Time

            The first 1 min. candle was a doji so it doesn’t mean much. The stock basically didn’t decide which direction it wants to go yet. But the second red candle was a big indication that it wants to go lower. If it rests for a bit, I was ready to short $TSCO at the break of the Bear Flag. $TSCO bounced slightly off of $64.40 and rested. Once it broke below $64.40, I shorted it but got a horrible fill.

            Entry Price: $66.31

            Entry Time: 9:34 AM

            Stop Price: $67.51

            Risk: $1.15

$TSCO Entry on 1 min. chart

Trade Management and Psychology

            In the morning the SPY moved sideways, usually a worst case scenario for day traders. But my money was on $TSCO not the $SPY. $TSCO showed a lot of relative weakness when it trended lower while the $SPY consolidated.

            Throughout this entire trade, I was only out of the money for a total of 20 minutes. This made it easier to sit back and let $TSCO do its thing. It never came close to my stop.

Exit Price & Time

            It always stinks when the price drops like a brick after you cover your position. Wait, but it also stinks when it spikes right before I cover my position. I’ve had both happen to me. So this is why its better to be unemotional and not worry about each individual trade.

            Exit Price: $65.16

            Exit Time: 3:30 PM

$TSCO Exit on 5 min. chart

$TSCO Trade Executions

Results and Evaluation

            This would be considered a good trade, but the truth is that it didn’t move enough. The profit I made on it is just shy of covering 1 max loss trade. You always want your wins to be bigger than your losses, not the same size as them. Still, I am grateful for this win but acknowledge that it was just a 1R win.

Risk: $ 1.20

Reward: $ +1.15

R Multiple: +0.96 R