This was a relatively long stream that contained a ton of good information, so this is a really long post. Just so you can’t say that you haven’t been warned.
Kristjan’s positions
AI
APLD
CVNA
FTCH (bought during this stream)
IMGN
LI
PLTR
SHOP
SOUN (new since previous stream)
Kristjan sold $MNDY the previous day, 18 May 2023. $MNDY is discussed further later, with a few charts.
Kristjan’s watchlist
GSIT
Market outlook
We’ve had loads of opportunities in the EP space recently (though breakouts haven’t been working since November 2021). To quote Kristjan:
“There’s just so much opportunity, guys. There are no excuses. All these bears calling for a […] crash [are] the same people who have been at it for the past 50 years.
“If you focus, […] right now we’re in an uptrending market. Stuff just explodes. Now, you can be in the whining camp, […] or you can actually focus on what’s going on in front of your eyes and make money off of it.
“There’s going to be crashes, there’s going to be bear markets — we just had a bear market last year. Sure as hell there’s going to be a storm coming. But that doesn’t mean that you’re not going to leave the house when it’s sunny, right?!
“But that’s literally how some people live their lives in the financial markets — always looking for the next crash, never going out in the sun, never enjoying the good weather.”
Unfortunately, people are wired to tune more into negative than positive stuff — just look at the news for proof of that. Doom and gloom sells. In conclusion, turn off the news and focus on price (and volume).
Having said that…
Kristjan also mentioned how pretty much every stock in the market is essentially headed towards bankruptcy, it’s just a matter of when.
This doesn’t change his earlier point about making the most of opportunities when they present themselves though: follow price and volume, and accept that the s**ttiest stocks are the ones that make the biggest moves.
It’s up to you to take advantage of that, particularly while you still have a small account.
Focus on what’s important
Ultimately, price and volume are all that matter. This is even true for EPs: when looking for them in the pre-market, you check for big gap ups on high volume first, then you check what the news is. You don’t look for the best news, then buy the stock.
Kristjan has said this many times, but reiterated during this stream that he often doesn’t know or understand what companies do — nor does he need to know.
He just needs to understand the theme, as that’s a major factor in the odds of a trade working.
But he doesn’t do detailed research on the company, for which he doesn’t have the time or resources. He just needs to follow price and volume. Or in Kristjan’s own words again:
“Big funds […] do the research, and I just trade off the charts. Well, I don’t just trade off the charts, like, randomly — you need to have some kind of news or catalyst or theme.”
So how do you follow the funds? Well, for example, look at the volume in $AI that I’ve put a blue rectangle around:
That’s not mum and dad buying the stock. That’s funds buying it.
Relative strength
China stocks have really been dumping over the past few days — see the $FXI chart:
However, $LI (which Kristjan has in his portfolio) is holding up really well and consolidating after its recent EP — a really good sign:
You always want to be looking for signs of strength like that — the stocks that can ‘swim upstream’.
As another example, look at the area of $QQQ I put a blue rectangle around:
Now look at $NVDA during the same period:
See much better $NVDA held up compared to the rest of $QQQ? It made a much better move in percentage terms and made significantly higher lows. It didn’t even really retest the October lows.
Since then, and since the stream, $NVDA has just skyrocketed:
Bottom line: if the market is in a pullback, and you’re seeing a trending stock holding up much better compared to the rest of the market, that’s a powerful, powerful sign.
It’s another way of funds ‘drawing’ the charts for us, and revealing what they’re focusing on.
Industry strength
Back to the wider market, and what’s showing strength.
Biotechs are really strong — look at $IBB and especially $XBI:
Software is really strong too — see $IGV:
And semiconductors are also showing a lot of strength — see $SMH:
However, some semiconductor stocks are getting a bit extended, like $NVDA and $AMD — they’ve been going straight up for a while now.
Earnings season
Earnings season is nearing its end — the bulk of earnings have passed. However, we’ve had a really great month, with a lot of stocks breaking out of long bases.
Kristjan also remarked how a lot of stocks have been rallying on mediocre numbers, because the market is forward-looking. It is pricing in its expectations, presumably anticipating better numbers in future.
This is a sharp contrast to earnings season in early 2022, when many companies reported great numbers but their prices nonetheless kept failing — in that instance, the market (correctly) expected bad numbers going forward. As Kristjan says (and as discussed earlier): “That’s why price action is super important!”
The week following this stream, we got some earnings on 24 and 25 May 2023, but this earnings season is pretty much over; it’s mostly just smaller and China stocks that are reporting over the weeks following this stream.
Some quick notes about the charts below
If you’ve read my previous stream notes, you’ll notice a few of the same names making more than one appearance on this Substack.
Frankly, I think that’s a good thing — that tells you that those are the ones you need to be looking at over and over again, to reinforce what you should be looking for. I chose this Substack name, The Trading Resource Hub, for a reason.
It’s also something I don’t feel I can avoid — at the end of the day, these notes reflect the stream in question. As such, I feel they should include all charts that Kristjan discusses in a positive light, or that we can otherwise learn from, even if we’ve seen them before.
However, different to my previous posts, this time I thought I’d also add external links to relevant news or earnings, as well as ADR information and updated charts (from the days I’m writing this, after the 25 May close and during market hours on 26 May).
Let me know via Twitter or in the comments below if you’d like me to continue doing any or all of those things. Or if you have other suggestions for things I could be including!
Kristjan’s recent EP trades
Since we’ve been having a decent earnings season so far, before the open, Kristjan showed a bunch of EPs that he’s traded.
$SHOP
Kristjan bought the EP in $SHOP (3.9% ADR) on 4 May 2023, which has so far had limited follow-through, but the chart looks nice, surfing the 10-day MA.
The gap up happened on an earnings and revenue beat, but there was also news that day: $SHOP announced a 20% workforce reduction, and sold most of its logistics business to Flexport ($SHOP was trying to compete with $AMZN in logistics).
However, later this day, after the stream ended, Kristjan sold $SHOP. Now, at the time of writing, $SHOP looks considerably less good, although the gap is still holding:
$PLTR
$PLTR (5.4% ADR) had a good EP, on enormous volume, on 9 May 2023 on an earnings and revenue beat, plus it projected big revenue growth across 2023, increasing the numbers previously projected for the same period.
Kristjan caught this one, and reckons it was his best trade this earnings season, having a decent-sized position that’s up around 30% — that is, at the time of the stream. Now he’s up quite a bit more on this one, plus the stock has now properly broken out of a multi-year base:
Later in the stream, Kristjan mentioned how $PLTR is “a kinda funny stock”, as people tend to either really love it or really hate it — a bit like $TSLA in that respect.
$AI
The first stock of the day with a clear AI theme: $AI. It also has the highest ADR so far: 7.5%. Kristjan bought it when it gapped up on news on 15 May 2023, narrowly raising its guidance.
The chart still looks strong at the time of writing:
$IMGN
$IMGN (8.1% ADR) had an EP on 3 May 2023, when it announced good trial results: its ovarian cancer drug ELAHERE™ shows a survival benefit. Kristjan bought the stock, and mentioned that it hasn’t had another leg up yet. Hopefully, we’ll get it.
At the time of writing, $IMGN still hasn’t had a real leg up, though it continues to look good:
$APLD
$APLD (12.3% ADR) had an EP on 16 May 2023, when it reported news: it had signed its first major customer for its AI cloud service (note the AI theme again). Kristjan holds a tiny position in this stock in his tax-free account.
The stock has made a good move since the stream:
$ZS
Kristjan traded $ZS (3.9% ADR) when it gapped up on 8 May 2023 on news: it expects to report Q3 results above the guidance, and raised guidance for the full year.
However, Kristjan has already sold the stock, as he didn’t trust the market yet, so decided to sell some things into strength, including $ZS, and wait for new opportunities.
The stock has since climbed further, though clearly doesn’t look as good as some of the other charts we’ve seen, and may be running into the 200 SMA/EMA (currently in similar positions — the green line in the screenshot below is the 200 EMA):
$SRPT
Kristjan bought $SRPT (4.1% ADR) on the EP on 15 May 2023, when news came out on an FDA vote in favour of accelerated approval. However, the trade didn’t work out, and Kristjan got stopped out:
This stock is a good example of why you need to trade with stops — look at it now:
$FSLR
Kristjan got stopped out of the EP in $FSLR (4.1% ADR) on 12 May 2023, following the news of its acquisition of Evolar, strengthening its global technology position in thin film photovoltaics (PV).
It has since found support, but there are plenty of other stocks that are looking much better right now:
$MNDY
Briefly mentioned earlier in this post. Kristjan said that he had a “pretty tight” stop on $MNDY (4.9% ADR), which he entered on 15 May 2023, when it had an EP on an earnings and revenue beat.
He sold it before the close on 18 May, because he didn’t like the action — all the other EPs were going up, whereas $MNDY was pulling back from the first day.
However, Kristjan rebought it on 22 May 2023, after that day’s stream. The stock has pretty much gone straight up since then:
There is a big lesson to be learned here: a stock doesn’t care that you traded it before and got stopped out, or sold it prematurely. If it sets up again, you’ve got to get back into it, regardless of your history with, or bias towards, the stock.
Incidentally, the reverse is true too: just because you made money before on a stock, or like the company, or have any other type of positive bias towards the stock, that’s no reason to force a trade that’s not there.
We are traders. We follow price and volume, and execute only when the odds are in our favour.
$DKNG
Kristjan bought $DKNG (4.4% ADR) on 5 May 2023, when it had an EP on an earnings and revenue beat, but he got stopped out. He did remark that it was a bit extended going into earnings, which lowered the odds of the trade working.
Kristjan also mentioned that he traded $DKNG last earnings season, when it had another EP on 17 February 2023, which failed despite having an earnings and revenue beat then too — the result of a weak market.
However, since then, it formed a base, broke out of it, and surfed the moving averages into the May 2023 earnings to then have another EP, even if that one didn’t work out either. However, the chart still looks good, even if not as strong as a bunch of other recent EP stocks:
Kristjan’s recent EP misses
$DDOG
$DDOG — a nice, liquid stock with a 4.3% ADR — had a good EP on 4 May 2023, with both an earnings and revenue beat, but this was one of Kristjan’s bigger misses of this earnings season.
At the time of writing (25 May, after the close), the chart still looks good (see below), though note that the recent flag (which wasn’t the best-looking setup anyway) failed — in case you needed reminding, breakouts aren’t working very well right now.
$UBER
$UBER (3.1% ADR) had an EP on 2 May 2023 on earnings, with not just earnings and revenue beats, but also record free cash flow. Kristjan described the setup as “picture perfect”, but unfortunately passed on it. The move that followed wasn’t that big, but the stock is very liquid, so would have been a good opportunity for Kristjan to trade with a lot of size.
$VKTX
A little less recent, but Kristjan mentioned during the stream that he missed the EP in $VKTX (7.0% ADR), because it had another EP shortly before that. But nope, the second EP worked too, almost doubling from the correct entry point:
The first EP, on 19 December 2022, happened on positive clinical trial news from $MDGL (covered later), as both companies operate in the same space: selective thyroid hormone receptor agonists for the treatment of non-alcoholic steatohepatitis (NASH) and fibrosis. The $MDGL news meant that $VKTX became a potential buyout candidate.
The second EP, on 28 March 2023, occurred on the company's own positive trial news. (This is the trial that is related to $MDGL’s trial results, triggering $VKTX’s first EP.)
More charts: Kristjan’s new positions
Kristjan didn’t actually talk about these during the stream, but you could work out the below by looking at different streams and understanding his trading style.
$FTCH
Setup: Earnings EP (earnings and revenue beat)
Industry: Specialty retail (luxury e-commerce fashion)
ADR: 5.3%
Kristjan bought $FTCH during the stream around 9:37 EST. This was the daily chart at the time:
And here was the 5-minute chart. I’ve marked the buy area blue (just above $5.42) and the stop loss red ($5.15):
As you can see, Kristjan got stopped out of this buy (10:51 EST, after the stream ended), but rebought it the next day (22 May 2023). As he explained during the stream on 23 May: “It had its highest volume ever. I can’t ignore that.”
To be clear: I’m not highlighting this quote to encourage random buys of stocks that just happen to have their highest volume ever (and in any case, none of this is financial advice — you should do your own research). I’m highlighting it to emphasise just how important big volume is. It is something traders should be on the lookout for, as that’s the sign of institutional buying when combined with good action.
$SOUN
Setup: Anticipation (early breakout, part of a hot theme)
Industry: Software (voice AI platform)
ADR: 10.3%
Kristjan bought $SOUN the previous day (18 May 2022). During that day’s stream, he set an alert at the trendline I’ve added a blue arrow to below, which went off a few minutes later (9:40 EST). However, Kristjan didn’t execute immediately, just added it to another watchlist.
During the stream this post is focusing on, $SOUN was among Kristjan’s positions, and he had his stop loss at $2.72, as visible in the chart below (screenshot from the 19 May 2023 stream). It’s hard to know exactly where he bought it, as he said that it was an anticipation buy.
Other good EP charts
$APP
Another earnings EP, this time in $APP (4.6% ADR) on 11 May 2023, although the numbers weren’t that great.
However, Kristjan pointed out that the market is a forward-looking mechanism — it’s probably expecting bigger profits and revenue growth going forward.
More importantly, Kristjan said the chart is “picture perfect”: the EP in $APP happened as the stock broke out of a base, on earnings, after building higher lows for five months. As Kristjan says: “That’s what you’re looking for!”
Kristjan also remarked that $APP hasn’t had much follow-through at the time of the stream yet, but “it’s still early”. Plus, at the time of writing, the chart still looks good:
We’ll just need to wait to see what it does over the next few weeks and months.
$ENVB
$ENVB (17.3% ADR) had an EP on 18 May 2023 on news: it received a Notice of Allowance from USPTO for a patent application, “C4-Carboxylic Acid-Substituted Tryptamine Derivatives and Methods of Using”.
The correct buy point was at the ORH, where I added the blue line and arrow. This stock went up 99% intraday, so it was without question a good EP. Also, this stock is really illiquid, so as Kristjan always says: small account edge!
$MVST
$MVST (15.2% ADR) had a good EP on 10 May 2023 — big gap up on huge volume — following an earnings and revenue beat. The company also raised its guidance.
At the time of the stream, the stock was mostly just moving sideways. Unfortunately, this EP has failed since then:
$NNOX
$NNOX (15.2% ADR) had an EP on 1 May 2023, on the news that its medical imaging system received FDA clearance. From the correct entry point, it more than doubled:
At the time of writing, the chart still looks good, getting tighter while building higher lows after the aforementioned big move upwards. Considering the current environment for HTFs and breakouts though, whether it will break out of its range — and, crucially, hold its breakout — remains to be seen.
$USGO
$USGO, a really tiny name with an ADR of 8.8%, had an EP on 8 May 2023, though on no apparent news:
Since then, the stock has been flagging, building higher lows:
As to whether any breakout would have any meaningful follow-through — right now, the odds are against you.
$MELI
$MELI (3.4% ADR) had a good EP last earnings season, on 12 January 2023, on news that its biggest competitor imploded.
Kristjan mentioned that you can hold EPs for just days, but you can also hold these types of stocks — larger caps with institutional support — for months or even quarters, as demonstrated by $MELI above.
$MDGL
Kristjan also mentioned how there’s nothing wrong with trimming a position after 3–5 days as the stock goes up, particularly smaller caps, which tend to move more explosively.
In fact, in a situation like $MDGL (5.0% ADR), when you get a 50% or so move in just three or four sessions, “you have to trim!”
After that, you can trail it with a moving average, like the 10- or 20-day — whatever works best for you.
$MDGL had an EP on 19 December 2022 on news about positive clinical trial results (as discussed earlier). And as you can see, although the chart still looks good, it so far hasn’t really exceeded the highs of the initial explosive move.
More stream notes
All my Qullamaggie notes are available here. One of particular interest to you may be the masterclass on EPs from 18 May:
Other trading resources
The Trading Resource Hub’s full archive is available here, which includes posts relating to quantitative analysis, psychology, and more. I also take notes on other traders, including Dr. Mansi.
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More about Qullamaggie
To learn more about Kristjan Kullamägi, aka Qullamaggie, and the way he trades, visit qullamaggie.com.
All past streams are available on Kristjan’s YouTube channel.