$2GO Trade Dissection - Kidlat Trades June 2017

As part of my own curriculum for self-learning the ZF system, I always dissect trades from the ZF Tribe. 

I do not belong to ZFT, I'm just an independent trader trying to reverse-engineer their system.

One of their elite mentors I look up to is Kap Kidlat Santelmo.

Why? (Wait, who doesn't?)

'Cause his trades are so remarkable. He has this profound way of trading, both mentally and technically. 

Kap's trades for June.
 11 outstanding trades overall. Galing diba?
Lupit pa ng caption!

And also,

I want to be like him. 

I want to achieve his level of mastery in this field.
Ops, Walang basagan. 
Libre naman mangarap :D

What interests me most is his $2GO trade. His biggest gain for June. I never traded $2GO (missed it). But the setup and reward is so juicy that it's so hard to miss. Next time, hope that these opportunities can be spotted that easily.

So I decided to blog about my dissection for $2GO. 

I'm sharing this to gauge my knowledge of the system and of course, for everyone's perusal.

Feel free to comment in the most technical way you can.

If you happen to be a ZFT, feel free to criticize.

I just hope I'm doing it right. :)

Here we go...

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1.       2GO Trade

Setup               :    Breakout Play

Conviction         :    ATH BO | Parabolic | AOTS daily & weekly | RSI70 weekly | Support Confluence 

Trade Objective :    Swing/Momentum

Kap's $2GO trade.
May 25 to June 1, 2017. 5 trading days hold. +69.76% gain.

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2GO Weekly Chart – May 24, 2017 Wed (before the ATH breakout at 18.60)

It’s much better to look at the longer timeframe. In this way, we get to see the overall trend and behavior of the stock. Let’s first dissect 2GO from the weekly perspective then let’s see what happened on the lower timeframes (daily and intraday).

1. First, plotted All-time High (ATH) resistance at 18.60. This will serve as the trigger point. If this will be broken with conviction, then it is poised for another rally.
2. Plotted forward Fibo from last 4 weeks (11.54 to 18.60 – I used wick-to-wick here).
3. Last 3 weekly candles seem to respect 38.2% and 23.6% fibo levels (15.90 to 16.90 area respectively). Based from fibo rules, should 38.2% and 23.6% levels hold, the trend is still intact. It also shows a tight consolidation and possible formation of a ‘flag’.
4. RSI weekly is way above 70 (RSI 92 level), this shows that the trend is really strong. But of course, better to be cautious, the stock can be toppish too.  Switching to lower timeframe helps us to decide better.
   
   Other observations in weekly chart:                              
   -          AOTS in weekly; stock is uptrend (bullish)
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   2GO Daily Chart – May 24, 2017 Wed (before the ATH breakout at 18.60)

   Here, we get to see the daily price action. (Malamang, daily nga eh hehe)
5. The Fibo levels 38.2% and 23.6% (15.90 to 16.90 area) are confluence with SMA20 (red line). Take note, SMA20 is being respected since its first rally in April 2017 (point 5a). This is also the trail support for trend-following plays. (Should this level hold and price bounces here, then we might see another rally. If it breaks, the stock might consolidate or can weaken out). Going back, we can assume the current level is being supported. These support confluences show enough conviction. We can set a cutloss point below this area.
6. Notice that the volume is getting tight, no heavy selling or buying - yet. 
7. RSI daily is hovering at 70 level. Now this is good, since we want to see stocks rally above RSI70 level. As another conviction for this trade, RSI weekly is leading RSI daily.

a.  Observation for RSI characteristics: when weekly RSI is >70, the daily RSI can go above or below 70 especially when daily chart shows consolidation. Price breakout or breakdown can lead RSI daily up or down.

                b.   In hindsight, 2GO did broke out from its All-time High.                          

        

       Other observations in daily chart:                    

-   AOTS in daily; stock is uptrend (bullish)

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2GO Daily Chart – May 25, 2017 Thurs (ATH breakout at 18.60). 2GO closed at 19.70 (+13.9%)

This is the day $2GO breaks out of 18.60. Runner-Runners triggered. 

What happened after was:

2GO Daily Chart – June 1, 2017 Thurs (New ATH at 30.9).

2GO closed at 27.25 this day; +46.5% from previous’ ATH of 18.60

Of course, Kap Kidlat’s $2GO reached 30.00 level, +69.76% gain from an AEP of 17.53. Let’s take a look at the intraday chart from May 25, 2017 to June 1, 2017. Let’s see how he might probably executed it.

2GO 5min Chart – May 25, 2017 to June 1, 2017. Beautiful Rally.

Possible area of buying:

Buying area probably happened between May 24 and May 25 in the Darvas box 1 shown below. There's a tight intraday consolidation before the breakout.

2GO 5min Chart – May 25, 2017 Thurs. Previous’ ATH 18.60 was broken.

A major resistance now turned to support.

[May 25, 2017 Thurs - 5min chart]

2GO started the initial uptick at 11:45am. This is a breakout from the Darvas 1 box.

At 11:50am, breakout at Darvas resistance 2. At 1:30pm after recess, breakout at ATH. All breakouts were supported by volume buying. After which, it continued its rally and closed at 19.70 that day.

Possible area/s of selling:

1. 30.00 area. Whole number and major resistance.

2. SMA50 and SMA100 break in 5min chart. Prior to this, bearish divergence manifested during the rally.

2GO 5min Chart – May 25, 2017 to June 1, 2017

[In 5min chart]

On May 30, 31 and June 1 - Bearish divergence seen in the 5min chart of 2GO. As the price makes higher highs (HH), RSI makes lower highs (LH). This is a manifestation that the rally is losing its momentum. June 1 opening, 2GO topped at 30.00 area and went back to 27 area (highlighted box). 

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EDIT: One way to look at this trade is how Master Zeefreaks traded his MAC & SSI lately:

Master Zeefreak's MAC trade
Click here for actual post

    And the simple criteria:

Reasons for buying / selling

    How $2GO trade will look like if we apply Master ZF's way of trading it: 

Much simpler :)

- End of $2GO trade dissection -

That's it! 

I still have to dissect the other 10 trades from June and previous trades from other months.

More to follow.