 Welcome with us folks to this first edition of 2022 trade recaps. Today we played Tesla that had great news on this record breaking number of deliveries that they had in 2021. This took a lot of people by surprise because the price was going down. As of last week, if you were in with us on our last podcast on Friday, we discussed about what we thought Tesla would do after the delivery numbers would come out. We all agreed that if numbers were great, obviously it would start to skyrocket. However, numbers weren't great. Numbers were ahead of what everyone was expecting. If you look at what happened last week on the one hour chart, look at this. I mean, it's all looking down. There is a line of support there, but it's all going down and it looked like it was priced in as people did not expect that much of a breakout. That much of a high number of deliveries and look at what happened. I mean, on the delivery numbers, it just exploded. So let's go to the five minute chart because this is the important part. Yes, there's a huge gap up. In the morning and a lot of people are like, I'm not super keen on applying the gap up because there's a lot of chances that it will fill on the way down. But wait a minute, you have all of Wall Street expecting the whole thing to be not as good as they printed. Numbers were excellent. I believe they were 16% higher than expected. So basically you have a ticker that is taking everyone by surprise. You will have a lot of short sellers that are caught with their pants down. And this is exact. I'll show you what I was looking at. Look at the pre-market. I'm really putting a lot of attention to this pre-market activity. Here is the last support that I will see before this bridge. This gap is bridged on the way down. Last support is here, if I were to trade the stock. Now look at the movement. It starts to move up and it goes to what? This is all pre-market, right? This is pre-market until 9.30. This is the first volume bar that's the 9.30 bar, right? So up until here is pre-market right there. So ticker is moving up up to this point, right? And then it consolidates and then all of a sudden it starts moving up. You see this volume is rising pre-market as well. This is drawing my attention because it keeps on climbing all the way to before the bell. And at the bell, it dips basically very, very close to this line, right? Let me take all of this off. Now please follow me here. I tell you a lot about this in this pre-market support is extremely important, right? It dips to this used to be resistance, now it's support. It starts climbing. Now it started very, very quickly. I thought it would dip down maybe to this line, but it did. And when you see that as soon as it cleared the pre-market high, this is where I was like, okay, we go in. So as soon as it broke pre-market high, I was looking for a downturn. If you buy when it's going up, you're paying extremely high premium. So what I'm doing is if it starts going up, I'm looking for on the one minute, a chance that it comes down a little bit so you see premium is pushed down and then it starts moving back up. Now, we have a lot of times, a lot of the times where we're trading Tesla, what happens is you see it starts rising extremely quickly. And this is what I was kind of afraid of because as soon as the market opened, we were breaking above this pre-market high and it started rising. We could have gone directly extremely high. It's not what happened. And a lot of people and a lot of people DM'd me saying, well, it's moving down and what are we doing? Because we took the 1250 C's. It's out of the money and 1250, just so you know, is higher than all-time high on Tesla. And we're taking something that is higher than all-time high on a weekly, which only has five days of trading to go because if I include today. So basically, we're taking the trade as it broke the pre-market high. It dipped under. Okay, now this is what you do. A lot of people will say, okay, I have a 20% stop loss. Well, 20% on Monday is not 20% on Tuesday. Well, the price movement of the ticker is different as you get closer to expiration. So we took 1250. And I'll show you why in a moment, but I want to tell it, I want to let you know, let me zoom in on this so you can, you can all see what I mean about playing support and resistance. Let's go back here. And I'll put the old show you here, you know, the high of pre-market. This is the line for high of pre-market. And this is what happened. We're at pre-market. We get to this high. So basically, as soon as we break this line, I'm extremely happy and I want to get in. It dipped where to support. Remember that high of the pre-market. Before it started breaking, you know, this line, there was a resistance line. This resistance line is the new support right at the gate. We hit that support. Yes, this could have been a very good entry point. However, I was under the impression that they would have dipped maybe a little further down because we didn't start all, all of a sudden to move above the pre-market high. No, we went for a little, a little bit of profit taking. And then we hit this support line, which was the old resistance line support. And then we started moving up as soon as we crossed that. This is where I decided to enter my position. And then it started moving down from here to there because of all of these two guys here, premiums were jacked big time, big time price was up, big time. And we all saw that it didn't take much from the high part, the high point here to the low point there. I believe there was almost a 50% drop in option prices. Now, market makers love this. Why? Because they're making sure that a lot of people will have second thoughts. You'll have second thoughts because you're like, hmm, okay, I'm losing a lot of my premiums. However, this is only if you look at your P&L. If you don't look at your P&L, and if you look at the chart itself, the support was the old resistance line. And we're not even there yet. See, the support, if you look at the ticker, we open. This is the low of the day. We're moving up, coming down. Oh, yeah, it's coming down. But this creates a higher low. So basically, no one is selling. Everyone's buying. I mean, if we had lost the slow and then we started to lose making lower lows, now it would have been a lot different. However, you have record-delivering numbers and you have a ticker that is extremely bullish on the day. However, when this happens, you see this big red candle, you can say, hmm, why am I going down? Why is this ticker going down while everyone is expecting it to go up? Now, take this. You have to look at the rest of the market and for that, I'll take you to the spy chart just for a second. Now, this is the spy chart as we opened today. And look, this is the higher pre-market. And if we want to be consistent with what I just told you, now you would expect that if this were to break above, we would become bullish. However, it's not the case. We went down this pre-market and as soon as this market started open, we did not even cross this line. So basically, we became bearish. However, 945, that's where we had this big drop on spot. If you look at back a little bit, zoom out. Are we breaking support going any lower? Look at this line. I'll put a line here near 474, which is old support. I'm sure you guys all see this now. This is the old support. Now, it dipped a little under, but it became support again, high or low. And all these lines here are pretty much the same. You guys all agree with that. Now this becomes support. I see that all those spies started to look dramatic from 477 plus to down to 473. It's a huge drop in just a few candles. So you could expect the rest of the market to do the same thing, which is exactly what Tesla did. However, as soon as you get bullish, you get some bulls entering the market. And from this lineup to there, you can be sure that anything that has a lot of bullish volume in it will continue because strength is on their side. Let's go back to. Now we're back in Tesla. And like I said, we had this line, which was the pre-market high happens to be the consolidation. Where the ticker was having a, not a hard time, but it was struggling to get through this line. It bumped its head right there pre-market. Now it's trying and trying. And as soon as it popped above, there you have it. It's moving to the upside. Same thing here. We had the bottom, which was the support of pre-market resistance that became support. Higher low. All this matched with the spy boughs that we just looked at. So basically you have a play that, you know, it's probably going, most likely going to go up. It's going to go up from here. If you look at your P&L, yes, it could have been probably down quite a bit. Like I said, premiums from something that is out of the money that is losing, losing ground on, on the day like, you know, we all saw spy being looked very bearish at one point in just a few candles. Well, everyone's jumping ship. Everyone's trying to get rid of their premiums and contracts and Tesla. First thing you know, everyone wants to get back in. Now, I was happy with staying in and I call the 1200 target for Tesla and I'll show you exactly how I got that. We have, let's, the way to do this is to look in this particular case is to look at the daily chart. You look at the daily chart and you'll see a few things. I'll show you that in a second. You look at where possible resistance can be. See here, there was resistance because it started moving down after it lost. It hit that same thing here and moved to a point and it moved down. And the next one over is this because, you know, it opened at the bottom here, went up there and closed at that area. So basically there's resistance very close to all this area, which happens to be the highest point when here is 197, sorry, sorry, 1197. Here is 1201, I believe, and here is a little under. So anything close to 1200 would be very close to a multiple top resistance that will probably get broken at one point. However, on the day on such a big day, you can be quite positive that even psychologically 1200 is going to be the number to get to get through. So I'm okay. You also, as soon as the ticker starts to go down, premiums dramatically drop because everyone is jumping ship. So I'm more than happy to sell while we're moving up. Even if we're just, you know, shy of that 1200, I believe we got out at 1196 or so. So basically we took partial profit, but the idea was to secure the first plan that was to get out at 1200. So just to recap this whole thing, I don't look at P&L. So look at support from Char. Where's the support? If you're afraid because you're moving back and you're like, whoa, okay, it's pulling back. It's a little further than what I thought it would. Well, you need to have a line where you're confident that it could bounce on and you need to find proper support. So I showed you guys where that support was. And then that's the easy part. I mean, it's to stay in the hard part is to get out on a target in a target. You have to look for proper resistance. And you also, you know, there's resistance there, resistance there, resistance there. And remember that whole numbers usually find a lot of sellers at that point. So in the end, you all saw that news was driven, was driving this Tesla to the upside. We were fortunate to find bullish buyers because the market held and we found the proper target to secure a partial profit on this upside move. So I hope you guys are learning from this and stay in touch and happy 2022. I hope you guys will watch more of these movies, videos as we go along. Take care, folks.