Express Scripts Holding (ESRX) Trade
What Does the Market Look Like?
I always trade with the market so it’s the deciding factor as to the type of trades I look for. In this case, the market is just coming off support so I’m looking for long trades.
Finding a Trade
I found ESRX in my scan and it meets all my requirements for a long trade. It’s making higher highs and higher lows, it’s just bouncing off support, and earnings isn’t coming up. It follows the market as seen in the charts below, but ESRX is in up trend.
Looking at the 3 year weekly chart, there also isn’t prior resistance that it can bump its head into.
I normally would have bought it the day after the reversal candle at support, it was a red candle so I was a bit cautious. I waited to see how it would do the next day and it closed higher and was a green candle so I decided to buy. I bought at $97.64.
Managing the Trade
I put my stop just below the previous low at $92.30 so here’s my calculation for the number of positions.
$97.64 – $92.30 = $5.34
I’m willing to risk $250 per trade which gives me 46 shares at my buy price.
$250 / $1.71 = 46
I bought and even 50 shares so if I hit my stop, I’ll lose about $267.
Ok, so this one didn’t pan out. I got stopped out at $92.30 because the market didn’t reverse like I thought, and I lost $206.32.
The market looked like it was reversing and it looked like ESRX looked like ESRS was going to make higher high, but instead, both of them went south. There was some news about the feds increasing interest rates, and talk of a government shutdown, and these had an effect on the stocks.
It looks like the general market may be headed for bear territory so I may just start looking at short trades from now on.