Gap Fill Trade Setups (SNDK, MRVL, SOUN)

This is the trading playbook where the charts do the talking and every session makes you a better trader. Hello everyone and welcome to the Sunday episode of the trading playbook. I'm your host Lawton Ho here with Verified Investing and we got an episode for you today. But before I go anywhere and start this off, I need you to do couple things for me. First of all, make sure to like this video and subscribe to the Verified Investing YouTube channel. It allows me to continue to put out free content just like this. And second off, before I go any further, if you haven't checked out yesterday's episode, um go ahead and check that out. I explain in detail gap fills, which is the uh technical indicator we're using today to potentially find some trades. All right. With that being said, here are this week's plays. Let me go ahead and share my chart and we'll go over a quick refresher before I go into it. We're using gap fills, right? So, on gaps, say gap here, right? It has not been filled. It's a green candle. The gap is on top. Green gap is on top. Red gap is on the bottom. Right? So, the closest gap fill here right here on the S&P is here. There's an additional one here. Oh, excuse me. Right here and then one down here. Oh, and of course, I forgot about this one up here. But green gaps look at the top. Red gaps look at the bottom. >> [cough] >> So, let's into it. Here is plan A. The first trade that we're talking about is SanDisk. And what I want you to look at before I go anywhere, pause the video. Do you see a gap on the chart? Where is the gap that I'm considering, "Hey, this is not only going to be a significant gap. Um Is it a longer short?" You got it. Okay. For me, the clear gap is right here at 1786 on SanDisk. Now, why is this like such a great gap? Well, taking a look at it, you're like, "Oh, well, it's not off of earnings." But, the gap down was about a 6% gap down. And after this price, the stock fell over 20%, almost 21%. Now, taking a look at this, you're looking at a recovery. A recovery that would be a push up 26% into a beautiful gap fill from just last month. And we're not too far away here on SanDisk, right? We're only about 5% away. So, so should price move up into there this upcoming week, this would be a great level to potentially short for either a day trade or a swing trade, right? Maybe a little longer. Additionally, you have another gap for additional resistance. So, let's say you don't want to go there cuz it's a little too aggressive. Or let's say you enter there on a swing, you can always consider adding up here, about 7% higher at $1918. A secondary gap there on SanDisk. I anticipate this to hit even though it is a shorter week. So, just remember that, you know, volume might be a little lower just like it's been just because we don't um we don't trade on Monday. All right? With that being said, let's move on to plan B. Now, for me on plan B, I'm taking a look right here at Marvell. MRVL. So, same deal. I want you to take a look at the chart and try to identify well, which were the gaps and where could Lawton potentially be looking to enter this trade. I'll give you a moment to pause it and take a look. Well, for me immediately, remember we're looking at the bottom of the red. 241.45, there will be a clear level of resistance up there. Why is this gap important? Why does it mean you fall? Well, look right here at that little E, stands for earnings. That would be a reversal of its drop on earnings. A reversal that led to a almost 17% fall after the stock reported earnings just um last week. Additionally, this push up into this resistance would be a move up over 20% from its lows favoring a pullback. All right, so should this happen either this upcoming week or the week following, I definitely think that that would be a huge level of resistance and one of us, at least in the trading room, will definitely be shorting this potentially for a day trade. Now, the interesting thing about this chart is let's say it reverses and absolutely collapses. Well, we can also use gaps to the downside. Should price come down to 194, 193.78, I anticipate support down there, but it'd have to fall 12%. So, on this one you're basically getting a two-fer, two-for-one deal. You're getting both a short level and a long level. And finally, plan C, SoundHound. So, on this chart, let's do the same thing. Where is the level? Where's the gap? Remember red, we're looking for the bottom. And right here at the bottom of this, look at that from the 5th of August, basically a month ago, earnings, where did the price go? Price pushed up 27%. And it since fell over 18%. Now, fall down here into this gap fill would be a move down 21 and 1/2 dollars. A huge retrace. Should price come back down into that level, I anticipate support, I anticipate a bounce. That's where I'd likely be a buyer. One thing to notice, unlike the other two companies, SoundHound's a little cheaper of a company, right? Only a 3 billion-dollar market cap. So, just make sure that you guys are careful out there when you're trading these kind of riskier or smaller companies, all right? With that being said, guys, my name again is Lawton Ho here with Verified Investing. Thank you guys so much for for tuning in. Let me know what you want me to cover, and I'll be sure to read the comments and look to cover something new next week. I hope you have a great rest of your weekend, and I'll see you guys next week. Bye, y'all. >> Life moves fast. One day you're starting your career, the next you're raising a family, running a business, paying a mortgage, and wondering where the last 10 years [music] went. Most people know they should be investing for the future. 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