Trader Janice

Trading My Way to Financial Independence
Hanes Brands (HBI) Trade

Hanes Brands (HBI) Trade

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So, what has SPX been up to? Let’s see, at point #1 on the 6 month daily chart below, there was a reversal signal. So I started looking for short trade opportunities. The next day was a huge drop. Definitely shortsville. I ran my scans and a few came up, but they had dropped so low that they became too far from resistance. I thought there would be some bounce back the next day, so I decided to wait. Point #3 was lower than the previous, but it was also a green day. When I ran my scans, a few that had huge drops had bounced back so I could sell closer to resistance.

SPX 6 Month Daily Chart

 

Finding a Trade

Hanes Brands (HBI) was one of the stocks that popped up on my scanner. It’s been making lower highs and lower lows so the primary trend is decreasing and it’s also staying under the 50 day moving average. It has no earnings coming up, and looking at the 3 year weekly chart below, there is no resistance it could run into.

HBI 3 Year Weekly Chart

It had a big drop which followed the SPS, as shown in point #2 below, but it also bounced back the next day so I could sell it at a higher price. And that I did. I ended up buying HBI for $15.71.

HBI 6 Month Daily Chart

 

Managing the Trade

I put my stop just above the previous high at $17.50 so here’s my calculation for the number of positions.

$17.50 – $15.71 = $1.71

$250 / $1.71 = 146

I sold 150 shares so if I hit my stop, I’ll lose about $268. There are no clear pullbacks on this one so I might just end up moving my stop down every time HBI makes a new low.

 

Results

Initially, I thought I would hold on to HBI and just keep moving my stop down because the dips weren’t moving far enough from the 20 day moving average which I was using as resistance. But, I decided to sell on 12/14 after 7 days because that’s exactly what it did. Plus there was a reversal candle at the bottom. Even though the SPX didn’t have a reversal candle, it was still overextended.

SPX and HBI 3 month daily chart comparison
SPX and HBI 3 month daily chart comparison

This trade was a gain of 13.46% with a profit of $317.25.

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