$RBLX - Classic case of "The trend is your friend until the end"

3 Jun 2021

RBLX broke its massive uptrend and made a solid move south. Puts are finally paying off as this stock is due for a correction.

Let's break down what happened here and how you can profit from similar price action.

Step 1: Find a trend and draw a trendline. The bigger the time frame, the stronger of a trend it is.

Step 2: Wait for a break. Do not enter simply because the stock is overbought, enter on confirmation and confirmation ONLY!

Step 3: Wait for confirmation, see chart for details



Step 4: Define your SL and price targets. These can be based on a variety of factors, but this is mine for RBLX



Since this is a major trend break I have a tight SL. As any move further north would invalidate this trend. This stock also sits at a major resistance giving me more confidence in this trade.

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Cheers!

Bonus tip: It can also help to follow the overall market, SPY , QQQ and the broader market were performing weak today which also helped my bias