Pre Market Prep

Fundamentals

Yesterday, shares of ASTS were lifted by the announcement of the Verizon Communications Inc. (VZ) deal. The companies announced plans to target 100% geographical coverage of the continental U.S. from space on premium 850 MHz cellular spectrum. There has been no other significant news since yesterday.

Technicals

ASTS made a 52-week high at $10.29 (69.2% surge from the previous session) in the post market on 5/29/2024. It then tried to test that level again in the pre-market but fell by 4.1% in pre-bell hours. RVOL was still elevated and clearly there was still interest in this stock.

GMan’s Pullback Strategy

• The stock must have a powerful opening drive with above-average volume.
• We need to determine the pullback trend (at least 4 candles).
• The pullback should be a lower-volume pullback.
• Determine the trend break.
• Enter on the trend break and set the first target at the previous swing low/high.

Post Trade Review

Right at the open, there was a significant sell-off down to the 2-day anchored VWAP (anchored to yesterday’s open). We hit the VWAP perfectly, bounced off, and began trending upwards. Shortly after, we broke the trend line on high volume with a big bearish candle, which coincided with the 61.8% Fibonacci retracement level.

I entered a short position, setting my stop above the previous swing high (upper red line) and my target just above the 2-day anchored VWAP (lower red line). I only set one target because I didn’t think we would easily break the VWAP after testing and bouncing off it so nicely in the opening drive.

There were multiple times I considered closing out this trade as we ended up consolidating for about an hour before finally moving in my direction and hitting my target. One thing that kept me in the trade was the low volume during the consolidation phase.

Overall, I wasn’t a huge fan of this setup. More than anything, it was stressful just waiting to see if sellers would prevail.