One lesson I have learned in this business is to never take a victory lap until you are at least 2x profitable from an entry point on any given trade.
However, with that said, it is perfectly ok to feel excited about a trade, especially if it is paying off because you were well ahead of the curve and used sound risk parameters plus exercised patience.
I did an article on Rivian on July 30th Is Rivian Number 2 to Tesla?
But I have been on this trade for even longer.
Do I have a Ph.D. from the Wharton School of Business?
No.
Do I have an MBA from Princeton? No.
Do I have a corporate bottom line to follow? No.
I come to you from a different classroom.
The content and picks I share derive from my being both a Master Teacher (M.S. in Education), a Veteran Floor Trader on the NY Commodities Exchanges for 14 years.
Plus, in the last many years, I have worked as a Partner in MarketGauge.com (Financial Publishing) and a Managing Member in MGAMLLC.com (Registered Investment Advisory.)
A different classroom.
I mention this to you as we begin 2025 as many of you do not know me, nor understand that my background is unique.
Most analysts you hear from have no trading experience and no technical analysis skills. Furthermore, many lack street smarts.
Nonetheless, in a bull market the ivory tower analysts sound smart.
In a volatile market, not so much.
So, what can you learn from a trade like Rivian?
First off, consumer instinct. I saw more and more Rivian’s in our hometown and across the country.
Secondly, pay attention to the news. Rivian made deals with Volkswagen, Amazon, and the US government.
Thirdly, learn to read a chart. Rivian cleared the 50- and 200-day moving averages in November. The momentum indicated a bullish divergence.
Fourth, find a good risk parameter. $12.00 became the base price.
Fifth, begin with a starter position, then build it up as the stock price rallies rather than adding to a position during falling knives.
Finally, have conviction that if 1-5 line up; the consumer instinct, headlines and chart points, it is a good trade. I have boldly talked about this stock on media for months.
This past Friday, Rivian gave us the gift we waited for.
Headline
Rivian Q4 Deliveries 14,183 Vehicles (est 13,472)
– Q4 Production at Normal, Illinois 12,727 Vehicles
– Production 49,476 Vehicles; Deliveries 51,579 Vehicles
– Shortage Of Shared Component On R1 & RCV Platforms No Longer A Constraint On Production
With over a 23% gain, we now have a cushion and can go to a no loss stop or higher.
Furthermore, Rivian had a breakout over $14.00. In July 2024 the stock traded up over $18.00.
While we wait for the January Trend Trade setup, at least we can say, Santa might have come a bit late, but better late than never.
Twitter: @marketminute
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.
