Double Dipping ANDS

*Trade Update Posted In Comments*

I have successfully implemented my strategy on ANDS. You may have read this post last week, and know that this is my second short of ANDS. It really is a beautiful thing to not only stick to a strategy, but profit from it when you follow your rules! ANDS met all the criteria I look for. Yesterday was it's first down day, so I shorted 150 shares at 7.34 near market open. This trade (and all others) are verifiable here, on my Covestor fact sheet. I'm still short ANDS for three reasons: 1. It continued to downtrend all day (Never really gave me a need to cover), 2. I'm not trading with 'scared money', and 3. I'm still subject to the PDT Rule, and didn't want to use up a daytrade (already used one on ANDS within this trading week). Below is the detailed chart of ANDS, showing my entries and exits so far (I will be home for market open tomorrow, and will look to cover if it doesn't continue it's slow death):


ZN has officially gone Supernova! This stock is highly illiquid, a low floater, and hard to borrow (I know, I couldn't find shares today with Think or Swim). This looks so much like NTIC (formerly NTI) from last year it's not funny. If it keeps going, think MXC and PDO (also small Oil companies).

We Shall See,

Evan

PALM Reading (Part 2)

History repeats itself. We've always heard that, it's been documented countless times in various scenarios, and recessions come and go (this will certainly not be our last). In that light, I've decided to post a 5 year chart on PALM, showing a bit of that 'repeating':

Were the 'smile' curves necessary? Not really;) If this is a precursor of things to come (as price action/technicals will determine), PALM is most likely headed toward the $5 level.

If you're interested in professionals' opinions on technical analysis, I highly suggest you check out these videos by Brian Shannon. I'd like to thank Charlie G. for his blog (it's where I first saw a Brian Shannon video).

We Shall See,

Evan

ps- I was fiddlin' around with Blogger to see if there were any cool, new gadgets to put down the side of my page. I came across the 'plane landing' game- ridiculously hard! See if you can beat my score of 6 (fyi, I don't get paid if you play)

Mission Accomplished: ANDS

     No, this wasn't on my 'Missions Briefing' watchlist- it happened way too fast! I was alerted to the stock ANDS by this post on Timothy Sykes's site Thursday evening. Since it didn't meet all the criteria of my strategy yet, I had no intention of shorting- until Friday's price action changed my mind. Morning spikes on stocks that meet most of my strategy's criteria (this one fits the bill except that it hasn't had it's first down day yet) are great to ride back down. Since I was working all day and couldn't watch the chart, bid/ask, etc., I texted my mom early on so she could try and reserve 150 shares with Think or Swim in case of either A: morning spike, or B: afternoon fade. She texted back with, "What price?" I instantly knew the broker had located the shares and wanted to know the price in which to short, but I wasn't ready. Not able to call my mom, I just decided not to answer (She would never enter a trade on her own, even though she's pretty good after a year of listening to me and reading Tim's posts on stocks I'm in). She texted back that she couldn't wait for me any longer (apparently she had other things to do all day:) and that the stock opened at 7.49 and was already at 7.79 at 9:55 am. I decided (since it was definitely showing signs of a spike) to tell her to short the 150 shares at limit price 8.15. I figured one of two things would happen: 1. if it got that high there was an excellent chance it wouldn't hold, and 2. I was easing into a stock I would want to eventually short anyway. Enough of my jibber-jabber, here's the chart that shows my (Covestor-verified) trade:

And here's a 3 month chart to show where this stock has come from:

     How I picked my exit- after what felt like 2 seconds, my mom texted, "Got it:)". This confirmed it was a genuine morning spike! Now what? I called her on my lunch break and asked her what the chart looked like at open, and if there was any volatility before the 'rocket launch'. She said around $7.45 it stuttered. I figured, if it did in fact collapse, it would shimmy a bit at that support level- so I told her to put a limit order to cover in just above it, at 7.50. And there you have it. The best thing about the trade is that it finished up for the day, which means I'm placing this stock on both my 'Missions Completed' and 'Missions Briefing' lists.

Enjoying the weekend,

Evan

Missions Accomplished: ARNA, SKYT

Well, my Covestor account has me worried (It's starting to look like the Supernova pattern Timothy Sykes has me all too familiar with). I was able to cover two stocks today, ARNA and SKYT. The first was ARNA. Below shows the incredible tanking at market open (the light blue column indicates After Hours trading from last night through today's pre-market). I was torn on this trade. I really didn't want to cover (even though I was showing a profit), but two things got the better of me:

1. It was one of those 'fall off a cliff' openings I was afraid would bounce back at any time (I actually covered on the first big bounce @ 5.95).

2. I was home this morning to watch it- usually a bad thing because my emotions and psychological quirks take over (I'm sure none of you experience this;)



Next came SKYT. I wanted to cover this one today for one main reason: It wasn't up enough imo to short in the first place. I was showing a profit, so when it finally fell a little (low volume stock that moves like once an hour), I covered @ 3.20- you can actually see my 150 shares on any chart.

Still waiting on MAXY to really lose some ground, and PALM to forget it was hyped so much.

Steadily gaining ground on Master Sykes,

Evan

Three Charts, Three Fates

I hope you're having a great weekend! I've decided to post charts of three of the stocks I've shorted over the past two months. You'll notice the same key elements in each of them: Volume gradually fades after spiking, once the seal is broken (first down day after big run-up) the stock gets as volatile as a bull seeing red, and finally the hopelessness sets in as it heads toward normal trading levels. In succession, I give you MAXY, SKYT, and GERN:

I'd just like to thank Timothy Sykes for bringing every single one of these stocks to my attention. I know how to find these types of stocks myself at this point, but if he's already doing the digging for me... :)

Mission Accomplished: GERN

It's a shame my Covestor widget (right hand side of page) hasn't updated yet. I'm at all-time highs (yeah, what is this- my first week active?)! We'll start with GERN, the stem cell stock I admitted to being a bit leary of after reading Yahoo! Finance message boards. Seriously, pick any stock I'm short, pull it up on Yahoo! Finance, and enjoy the ridiculous pumping and bashing that goes on 24/7! I'll always try to post a chart of my completed shorts, though the longer it takes to cover, the less detail online charts will show.

In other news, I bit the bullet and sold 3,000 of my 5,000 shares of SIRI. If it goes to the moon (like you'll see repeatedly in Yahoo! posts) I'll do alright, but if it goes belly up (probably 7 out of 10 posts on Yahoo!), I'll survive. I'm banking on these shorts for the time being, and my strategy was quite profitable again today. Enjoy the weekend and check out my Covestor account Sunday-ish (it should be updated by then and you'll be able to see my trade prices if you're a member- which is FREE!)

O.K. with two 'Not-So-Volatile' Days (hopefully),

Evan

Sirius Problem

No, that's not a typo. If you've been following my trades since I began this blog (and even more recently since I signed up on Covestor), you'll notice two stocks in my portfolio that I never mention: SIRI (Sirius XM) and THMR (formerly TMA, or Thornburg Mortgage). Everyone has skeletons in their trading closets, and these fellas are mine. I've ridden them down to almost nothing from about six months ago. I haven't the heart to part with them now, even though they continue to bludgeon me while yelling 'Yee-haw' on their way toward Subpennyland. Have any skeletons you'd like to share?

Besides the fact that Sirius's recent 'possible' bankruptcy news has eaten my gains from yesterday, I decided to short ARNA, and completely ignore rules #1-#3,#5 of my strategy. Everyone does this from time to time, but since I'm forced to ride my mistakes out (Rule #7), this trade could get ugly before the sun comes out. At least I only shorted 150 shares, and the stock is eventually due for a reckoning.

Learning about discipline the hard way,

Evan

My Four Horsemen

So while the world of finance came a-crumblin' down again today, being short MAXY, GERN, PALM, and SKYT (even though SKYT gained .01) paid quite well. Covestor is usually one day behind on updating their clients' portfolio values, but somehow my link (on the right) is two. I can't wait for it to show my most recent shellacking of the S&P. I would rather have the chart showing myself vs. Timothy Sykes (currently #1 on Covestor), but can't figure out how to configure the widget that way (any suggestions?).

I made two trades today, both profitable and loss preventing. I don't mind admitting that the talking heads over at Yahoo! Finance message boards are beginning to get into my head. Seriously, I don't know why I even read the ridiculous posts (9 out of 10 are bias with an agenda), but GERN is a stock focused on stem cell research, a science nobody really knows what to expect from yet. Given that Obama fully supports this type of research, I sold 100 of my 200 shares of GERN today at 7.48. I know, I know- I'm letting fundamentals interfere with my technical positions. I'm still learning the 'true' relationship between fundamentals and penny stocks.

Today was all MAXY needed to finally drift back below my initial buy (how many months ago?), so I covered 100 shares of my 300 at 8.17 near the close. I did this for three reasons:

1. Didn't want to be greedy (been there done that at the end of a down day only to see a gap up the next morning).
2. There was an earnings announcement after close. Don't think MAXY has a prayer (announcement hasn't come out yet 7:27pm 2/10/09), but why risk all 300 shares?
3. The stock downtrended aaaalllll day, and I followed Rule #6 of my strategy.

Unfortunately watching the market tread closer to year lows,

Evan

My Strategy

     It's about time I lay out all of my rules/criteria for choosing the stocks I short. There are always minor variations in the chart patterns (and I'll be the first to admit to bending these from time to time), but I like to stick to these 7 'unbreakables':

1. A stock that's had an incredible run (think 300%+ gains) over a short period of time (not longer than three months, and preferrably within three weeks).

2. I like the $2-$6 range, meaning the stock's around $2 at the beginning of it's run, and $6 near the top (or when I would consider shorting). I've found $1-$4 and $3-$8 can also work, but you get the idea.

3. It has to have had it's first down day. Period. Why short into something that hasn't shown the first sign of weakness?

4. Try to short stocks with a market cap <$500 million. You don't want extremely small market caps, though, or the broker you borrowed the shares from may force you to cover.

5. Large Volume spikes at onset of run have dissappeared (looks like a downhill slope).

6. Commit 100-300 shares initially to a short, and add only once more if it spikes (short squeezes) more than $2.

7. Fight every urge to cover!!!

     I haven't completely mastered the decision-making process when comes the covering for a profit. Currently, I'm using the same stair-stepping strategy used in shorting (Rule #6): Ease in and ease out. With the exception of Rules 6 and 7, this is pretty much the strategy I've learned following Timothy Sykes.

Warning: Do not try this at home!

Triple Play

I am now officially short MAXY, GERN, and PALM. All three met my strategy's criteria, and after having posted about each (except for GERN, which I had on my Stock Status's 'Mission Briefing' watchlist), I'm pleased with my initial entries. I had off this morning, and was ready with reserved shares for both PALM and GERN by market open (compliments of Think or Swim). I'll skip any rationale on MAXY, since those of you following this blog know I've been short about a month. As for PALM (which happened to be my first short of the day), all you pretty much have to do is look at this 1 year chart:

Sure, it may go higher in the near future (which is why I eased in with 100 shares), but I doubt the 'PRE' phone is enough to sustain this quick rise from the $1's. I know I said I could care less about the fundamentals, but this really isn't a true penny stock- it's the company that brought us the Palm pilot. Regardless, it's either consolidating or losing steam (volume leans toward the latter). Now that this account is on Covestor, you'll be able to watch the outcome. Since I don't plan on selling (aka 'covering') for a loss, this could be a wild ride!

Last but not least...GERN! This stem cell play gave me the perfect entrance on it's midday spike. I shorted at 7.96 and already have a decent profit on my 200 shares. If I listened to some of the posts (pumpers galore) on Yahoo! Finance message boards, I'd be freaking out! There's a reason most financial sites claim to be 'For entertainment purposes only':) Does this 1 year chart look familiar?

If you're a trader, and haven't opened a Covestor account yet- do it! It makes posting sooo much easier, knowing you don't have to take screenshots of your positions (like I did numerous times last month) for people to believe you. Thanks for annoying me enough, Tim:)

Happy transparent trading,

Evan