Momentum Reversal Method Strikes Again with MOBL
In early May, 2017, we alerted our follwers to a trading opportunity that resulted in a nearly perfect Momentum Reversal Method (MRM) setup – this trade was MOBL (Mobileiron Inc). Now that the trade has completed, we wanted to share with you an example of how the MRM trading strategy works and how successful some of these setups can become. But first, lets take a bit of time to understand what ActiveTradingPartners.com is and how we provide benefit and services to our clients.
ActiveTradingPartners.com is a research and analytics firm that specialized in US Equities, ETFs and major Commodities analysis. Our objective is to continually provide updated research and analytics for our members as well as to actively deploy our specialized Momentum Reversal Method (MRM) trading strategy for our members use and benefit. As many of you may remember, on June 11 2017, we posted our research that the “NASDAQ would sell off” and the “VIX would SPIKE” on or near June 29th, 2017. How many of you would have loved to know that we predicted a 6% swing in the NASDAQ and a 52% swing in the VIX two weeks in advance on the EXACT DAY it happened?
What we are trying to illustrate to you is that we attempt to provide value beyond our trading signals and beyond our daily updates. We attempt to keep you aware of what is likely to happen in the global markets and how these swings can be advantageous for you as traders/investors. So, before we get sidetracked on the extras we provide, lets focus on this MOBL trade.
MOBL began to appear on our MRM alerts in early April 2017. As with many of the MRM type of setups, they begin can sometimes start to alert us to setups days or weeks in advance of the actual move. In this case, classic technical and Fibonacci analysis assisted in confirming our MRM trigger. The MRM setup was valid and we simply wanted to watch the MRM setup for signs of price volume/rotation. We often use this price/volume rotation trigger as a means of setting up entry functions for pending MRM triggers.
In early May 2017, the price/volume rotation trigger was complete and now we had a valid entry into MOBL with projected targets of $5.45 and $6.25. Our analysts identify the targets based on recent price action, where our entry is located and current price/volume rotation levels. In other words, if we believe the move will be short-term, then we will adjust our targets to focus on immediate objectives. If we believe the move will be a bit longer-term, then we will adjust our targets to focus on that objective.
Just to be clear, everything originates from the MRM trigger. We may see 20 or 30 of these triggers each week. From there, price confirmation MUST occur or have already happened in order for it to be considered for our ATP members. Additionally, we attempt to gauge the overall global markets in terms of risk parameters for each MRM setup/trigger. If the US majors or global markets are weak and fearful, then we'll address that risk by being more selective of our MRM triggers and setups. If our analysts believe the US and global markets are going to continue to trend, then we may widen our risk parameters a bit more.
On May 11th, 2017, we issued a BUY Swing Trade Alert for MOBL @ $4.65 for a FULL Position. This exact alert read as follows:
Buy Symbol: MOBL
Max Buy Price: $4.85 or lower
Position Size: FULL
Stop loss: Close below $3.95
Target: $5.45, then $6.25 objective for a 17~35%+ swing potential
Enter FULL position below $4.85 today. A move above $5.35 is expected with a potential for a move above $6.50 later.
As you can see from these charts, we executed the MOBL trade flawlessly. The first target was hit only 6 trading days after entry for a +17% gain. The second target took a bit longer, but it was eventually hit 26 trading days after entry (about one month after entry). It was just prior to the second target being hit that our research team indicated that MOBL could run much higher and that we should alert our members that we are going to use Target #2 as a stop adjustment and attempt to let this position run. Typically, we get about 2~4 of these types of trades each calendar year for our members – you know, the big breakout runners that can turn into 30%, 50%, 120% or more.
When all was said and done, Our VIX/NASDAQ analysis was perfect and the rotation in the tech markets resulted in our MOBL trade getting stopped out July 3rd, 2017 @ $5.85 for a +25.6% gain. This single trade resulted in a +$4000 total return for our members – this one trade will cover their ActiveTradingPartners.com membership for almost FOUR YEARS. Believe it or not, we are expecting MOBL to generate another MRM setup soon that could allow us to re-enter this trade for the next run higher.
By Chris Vermeulen