💼 Inside the Portfolio: Updates from our Swing Trading Desk #06-2025

We're opening the books on last month's trading activity, with detailed charts and commentary

While we closed the month with a positive return, we are not satisfied.

On the surface, profit is profit. However, a look beneath the numbers reveals a performance that did not meet our standards for strategic execution. The positive results were driven by a few significant, well-executed day trades by our desk, which, while welcome, masked underperformance in our core swing-trading portfolio. Our primary objective is to generate consistent returns by correctly interpreting market trends, and this month, we fell short.

A single, frustrating trade perfectly encapsulates the challenges we faced: Quantumscape Corp. (QS).

In February, we published a deep-dive analysis on the company, identifying it as a potential market disruptor long before it was on the broader market’s radar.

Our extensive research gave us a detailed, almost granular, understanding of the company's fundamentals and potential catalysts. Trading an asset you know intimately provides a significant edge and the conviction to act decisively.

Unfortunately, when the pivotal news we anticipated finally broke after market hours, the execution failed us. The stock surged over 40% in pre-market trading but then sold off for the remainder of the session. Amid the volatility, we were unable to identify a disciplined entry point that aligned with our risk parameters. The stock’s weak close led us to shelve the trade, only to watch it surge to nearly $8.00 the following day. This was a textbook example of a missed opportunity, where deep knowledge was nullified by a failure to navigate the market’s intraday dynamics.

It was a microcosm of our entire month.

Looking ahead, our caution is elevated. We see signs of overextension in the broader market, a condition that naturally tempers our appetite for initiating new, aggressive positions.

Our focus for July is clear: we will regroup and recalibrate. The goal is to sharpen our execution and bring the performance of our swing-trading portfolio back in line with our expectations. We are committed to delivering more value and helping you capitalize on the market's most promising moves.

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June 2025 Gross Profit: 15.82R

June 2025 Open Profit: 5.11R

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TRADE #1: ELF - Delayed reaction EP

The Scene: It’s the kind of setup traders dream about. A stock gaps up, and not just on a single piece of good news, but on a trifecta of bullish catalysts hitting the tape all at once: a solid earnings beat, guidance that blew past estimates, and the strategic acquisition of the Rhode brand. The market, predictably, went wild.

Our normal playbook might have us jumping on a move like that, but we stayed on the sidelines. Why? The stock wasn't a neglected underdog we'd discovered in the bargain bin. It was already a market darling, having run nearly 70% in the preceding months, chasing it on the day of the news, with so much optimism already baked in, felt like arriving late to a party that was already in full swing. We decided to watch and wait for a more calculated entry.

The Spark: After the initial fireworks from the earnings announcement, the dust began to settle. For three days, we watched the stock consolidate its massive gains, inching higher with a quiet determination. This is where our opportunity began to take shape. We identified a minor, yet significant, level of resistance at $115.00.

Our thesis was simple: the initial buying frenzy was over, and now the stock needed to prove it had the legs for a second act. A clean break above $115.00 would be our signal that the momentum was real and sustainable. We planned our entry around that break, with a protective stop placed just below the recent lows under $110.00. This gave us a clearly defined risk and a compelling reward profile, exactly the kind of asymmetric bet we look for.

The Journey: We got our break and initiated the position. The first two days, however, were a test of nerve. The stock fluctuated around our entry price, occasionally dipping into a slight loss. It was the kind of shaky price action that can easily spook you out of a good position. But our thesis was based on the $110 support level holding, so we held our ground.

Then came the push toward $120.00. As the stock approached the level, we saw what looked like a brief, failed breakout attempt. This momentary hesitation was a signal for us to manage our risk proactively. We trimmed our position slightly and raised our stop to our breakeven point. If the trade failed from here, we’d walk away unscathed. But it didn't fail. The stock found its footing and began a powerful surge toward $130.00. We rode the trend until it showed its first real sign of exhaustion—a break below the 10-day moving average—and closed out the trade.

The Conclusion:

In retrospect, our entry wasn't perfect; a more aggressive trader might have bought a day earlier. But it was a sufficient entry, and in trading, "good enough" is often all you need. The real lesson here was in the exit.

Our broader market view was cautious, and that bearish sentiment bled into our trade management. We sold when the stock showed a moment of weakness, rather than scaling out into the incredible strength of the rally. The key takeaway for us is to refine this part of our process. From now on, we will be more deliberate about taking profits into strength, rewarding ourselves for a winning trade by selling shares to an eager market, not just when a technical level forces our hand.