Trade Opportunity Case Study of the Week: HIMS Range Breakout Post News Catalyst Gap – | April, 2025

The Trade Opportunity

The purpose of this weekly article is to analyze the top trading opportunity of the past week. This is to improve our identification and execution of high quality trade ideas that meet our setup requirements.

Each article will focus on a stock that meets one of three of the main categories of setups I trade:

• Range Breakout / VCP / tight area breakout
• Pullback to Support/ Key moving average
• Gapper / Post Gap Setup

These articles are like taking a step into the batting cage and loading up a historical at bat from an Ace pitcher in the world series – they will help you prepare and execute in future situations by studying important moments from the past.

The setups we cover will appear again and again in each market cycle

So far we have covered these case studies:
Previous article covering the BE Day 1 Gapper Setup
Previous article covering the AI Day 3 Gapper Setup
Previous article covering the DOCS Post Gap Range Breakout Setup
Previous article covering the ALAB Range Breakout Setup
Previous article covering the NVCR Range Breakout Setup
Previous Article on QMCO Range Breakouts
Previous Article on CRNC Episodic Pivot
Previous Article on VST 10 EMA Pullback
Previous Article on HIMS Range Breakout
Previous Article on TEM Opening Range Breakout
Previous Article on U Gapper Day 1 Setup
Previous Article on Okta Earnings Gapper
Previous Article on QBTS Catalyst Gapper
Previous Article on CELH Inside Day Breakout
Previous Article on SQQQ Oops Reversal

Previous Article on the CRWD Oops Reversal
Previous Article on the TTAN Range Breakout
Previous Article on the PLTR 21ema Pullback

I also have the following Educational Articles which expand more on Setups/Entry Tactics. I will be doing one on the positive expectation breaker entry tactic soon.
Oops Reversal Entry Tactic

Please let me know in the comments what other topics you would like me to write about.

This past week we continued higher and had a strong oops reversal on Wednesday.

Here are a few names worth studying from the past week

DUOL Earnings Gap Friday

UBER Oops Reversal

CRWV Gap and Go Friday

RBLX Oops Reversal

Today however we will be focusing on HIMS which was up over 45% on the week and up 20% from the range breakout

Looking at the HIMS chart there were several other things that stood out to me.

First HIMS has shown the capacity to make magnitude in the past.

Second it looked to have formed a base low against the green line – Its prior all time high.

3rd HIMS’s growth numbers are superb as well as the trend in fund ownership

Discovery

How would you get HIMS on your radar?

To trade HIMS you first need to get it on your radar. HIMS should likely be on your larger universe list since it is one of the leaders of the Weight Loss theme and made a strong run into the end of last year which I covered in the Trade Lab.

You could also have identified HIMS on the day of the catalyst by screening for high volume gaps or simply looking for the Highest Volume Ever Edge. Then you would investigate the catalyst and see a significant partnership with NVO to feature Wegovy on the HIMS platform – a development that could lead to increased earnings and sales.

HIMS also was featured in the April 29 Trade Lab Report the day before it triggered the range breakout

Setup and Execution

The setup for HIMS was an HVE gapper and the entry tactic was a range breakout. The setup day was a gap down however what stood out to me was how it held tight. A break above that day’s high was also close to a break above the prior base pivot.

When several pivots on multiple timeframes line up it can have a cascading effect, increasing the magnitude of a move as many participants become involved.

Here is what happened on Thursday on a 5 minute timeframe. Remember that we are only looking at a 5 minute chart because HIMS was setup on a daily timeframe.

HIMS gapped slightly above the range that formed late Wednesday but could not push R1 and needed to pull in further. It undercut the range before rallying strongly and setting up potential entry points with risk managed at lows within 3%.

With a 3% stop risking 0.5% of your account would mean you could enter with 15 – 20% position size.

HIMS then acted well trending above VWAP and basing at R2 before closing near highs and R3.

These are standard pivots and something I picked up from Oliver Kell.

This is the concept behind the Range Undercut and rally, my favorite entry tactic. You often see this play out on intraday charts when there is a consolidation day with a clear range that forms. Stocks will gap up, shake below the range and then go, or gap down and then rally through the range

Here is the price action on a 65 minute timeframe including the next day where HIMS followed through

Aggressive traders could have added off the open Friday but the best buy points were Thursday as it initially rallied.

Swing traders would be selling into strength at Friday’s Close at least part of their position

Position Management

HIMS is potentially just starting a daily uptrend driven by a news catalyst. Position Traders would have their stops at breakeven and be watching for the 21ema to rise above their cost to trail their stop at that. The expectation would be for HIMS to form higher lows and trend above the moving averages. They would ultimately be looking to sell on a bad break below the 21ema/50sma or other signs of trend-ending weakness.

Swing Traders as mentioned would likely have sold at least some into strength Friday and on a further expansion higher would be selling more and trailing the rest. They would be watching for a break of the 10ema/21ema to close any remaining position they were trailing.

HIMS could form a range here at the pivot formed at the March 25 high. If it does you would want it to close above that level. A big reversal lower closing below that level would be a sign for swing traders to sell out and even position traders to sell some with the rest at breakeven.