I am always looking for a good swing trade that could play out over a few days. Cree, Inc. (CREE) gapped down five dollars on earnings on April 23, 2014. It opened at $53.05 and closed down at $51.04 displaying that the stock was being overtaken with supply. CREE traded over six times its daily average volume at 13.4 million shares displaying the footprints of larger players leaving the stock. As a day trader, I was short CREE intraday and closed out the short by the close of the day but knew it could have more potential downside.
Entry Short at $50.80
Stop at $53.55
Target at $45.00
The Trade played out with perfection netting over $5.70 on the entire short for a three day hold. See the chart below to see how the price action played out.
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