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

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

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

Watching Paint Dry

In case you're wondering, I'm still short 300 Shares of MAXY (and still have my GTC order to cover 200 shares at 7.90). It is down trending nicely (even if it's slooooow). There are a couple 'bearish' technical indicators that look promising at this point. I wouldn't even know where to begin to try and explain technical analysis on this blog (and don't have the time or the energy), so I'll just use links to the terms I'm referring to and charts to better illustrate my theories ('theories' meaning that I welcome other opinions). Below is a chart taken from Yahoo! Finance and given the once-over in Microsoft Paint. I've only added black lines to show the first bearish indicator of 'down trending' (when a stock makes lower highs and lower lows). The second indicator is MACD. You'll notice, if you click here and read the Wikipedia definition, that when the MACD goes below zero, it is a bearish signal. This seems to be about to happen to MAXY even though the price has held it's ground.



GERN is my next target, thanks to TIM for bringing this stock to my attention. Stem cell stocks are 'in play' right now (meaning this sector is pretty much en fuego, being both volatile in price action and volume). It reminds my of the late '90s tech boom, when every company (penny stock or not) associated with the Internet was blowing up (as detailed in Timothy Syke's book- An American Hedge Fund). Thanks to the new Obama Nation (abomination?), stem cell research has been given the green light. I would love to see a true 'Supernova' (see last year's stocks PDO and MXC for supernova-type price action) come out of this new 'gold rush'.

Happy prospecting,

Evan