PCLN (Possible) Trade Update

There's no way I'm letting go of PCLN core short positions (equity) so that's not even an issue, I'll show you why, but I may VERY WELL enter a call position which is looking pretty interesting, but for newer members you should know I really don't like leverage as much as you might think and only use it as a tool, not a trading system. 

I use leverage when I see a good looking trading signal, but threre may not be enough profit potential in the equity position alone, for example, there may be a 2-3 day base that's going to pop to the upside, well that move may be worth 4 or 5 % as an equity long position, that doesn't really interest me to take the risk for that return, but if the signal is strong enough that it really looks like it will move, then I'll use leverage - options in this case, which I prefer to buy slightly in the money with at least 2x more time than I think I'll need. I'm not trying to hit triple digit home runs, I'm trying to use the leverage as a tool to make what looks like an otherwise excellent probability trade work as far as profit potential. I'm usually out of these positions ASAP, that means before the first significant pullback or slowing of momentum so these are not held for home runs, that's an easy way to go broke, but once in a while they are held longer than planned, which is why I go for the extra time, as long as the 3C signal is still good, I'll stick with the position even if it hasn't fired off yet, if the 3C signal is fading then I'll take my lumps.

Here's what I have on PCLN, it looks like it has a decent chance for a decent bounce, but in no way would I let go of trend/core/ equity shorts there because of a bounce.

Remember that we have Quad Witching tomorrow and Window Dressing (the art of looking smart) as it's quarter's end so there could be some funky volatility around that which has NOTHING to do with the overall market or response to the F_E_D.

Wednesday March 26th is the T+3 day for the quarter (Trade plus 3-days for settlement) so there are some forces, influences at work that are transitory, that may be why PCLN is looking decent short term as it has a 13 or so% gain on the quarter and managers will buy it art the end of the quarter as window dressing to make it look like they held it the entire time, "The Art of Looking Smart".

 This is the 4 hour chart, PCLN has big trouble/distribution here, this is why I'm not touching the equity trend short.

I included a few other timeframes just for good measure like the 60 min leading negative

Ad the 30 min shows where PCLN made it's move on some accumulation and the distribution since, that was in my view a larger head fake over some stiff resistance that caught the eye of a lot of retail traders, the $1200 centennial psychological area didn't hurt either on that front making it easier to distribute in to demand. There was a head fake as usual right before the move started running stops, which just gives PCLN more momentum for the move up and then snowballs to a short squeeze.

#1 is the area of interest right now with a small "W" like base good for a counter-trend bounce.

This is the area of interest on a 15 min chart and there's a nice positive leading divegrence there, not much past 15 min so it's not a threat to the short position, but it's decent looking enough for a long , I do prefer some leverage to increase profit potential though to take the risk.

Normally I'd expect a run below the yellow trend;line where there's a "Tweezer Bottom" candlestick support area to the left, a head fake under that trendline would be a perfect set up for a call position on the move below the trendline so I'll have price alerts set there and that may be the deciding factor for me as to whether or not to take the position, it's a much better entry, lower premium, lower risk.

 The 10 min chart with positive divegrences as well as a leading positive, this is where I really get interested as the leading positive is showing growing strength in the divergence.

 The 5 min positive just reinforces the confirmation of signals across multiple timeframes and raises the probabilities of a successful trade.

 And intraday the 3 min leading and positive at the day's lows.

Here's where I think we might get a better entry.

This is the 1 min intraday going negative and looks like a pullback coming intraday, perhaps below the trendlline?

Since this capture this intraday negative has moved to (migrated) the 2 min chart so a PCLN pullback intraday looks increasingly probable. If we can slip in under the trendline with confirmed accumulation, that would be a choice entry. Otherwise I'll set price alerts for other levels below as I rec'd you do if you are interested in the possibility.