How I Day Trade: Putting the Pieces Together in a Short on CRWD

CRWD rallied to 67 this week, satisfying the 50% Rule as it had advanced 50% off its 44.50 October low.

This is a logical place to look for resistance and a pullback.

On Wednesday, CRWD left a 10 day new high Topping Tail, or what I call a Lizard sell signal.

In other words, CRWD tailed off from a new 10 day high, suggesting short term exhaustion.

Additionally, in stabbing through the high 4 days ago within the context of a new 20 day high, CRWD left a Soup Nazi sell setup.

In other words, there was no soup for the trend traders who buy new 20 day highs.

Checking a 10 min CRWD from Tuesday through Thursday shows that once Wednesday’s up-gap was offset, CRWD was in a weak position.

CRWD gapped down yesterday, followed by a retrace to the open gap.

An Opening Range Break (ORB) on trade below the 1^st half hour’s low left CRWD vulnerable to a waterfall decline.

Thursday, CRWD followed through decisively to the downside before rebounding.

Notice the logical retrace that backtested the Opening Range Break.

We advised members on our Hit & Run private Twitter feed to take a short position.

We got filled at 63.38.

This morning, CRWD fell out of bed, dropping 3 points out of the gate and we covered at it tested Thursday’s lows.

CRWD looks under distribution near term, but we’ve locked in our gain. Next!

The takeaway is twofold:

1) Multiple signals present high reward/lower risk setups.

2) Despite CRWD rebounding yesterday, it left a solid distribution day revealing it had caught a seller(s). The indication was the line of least resistance was lower leaving CRWD vulnerable to an opening downdraft.

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