CHATROOM

5 Stock Unpicks

November 18, 2007 at 11:38 am
by Timothy Sykes

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People love stock picks, especially when the stocks are low priced. So, here are five actively traded low priced stocks I’m calling my “unpicks”. There are plenty of stock picks out there and 99% of them are crap so I’m going taking the opposite side here, saying avoid these stocks completely. In my experience, staying on the sidelines and avoiding certain stocks has helped me earn above average returns.

Ford (NYSE: F

), $7.70, my #1 stock unpick right now. We all know this company—I mean how can we not, considering there’s about a dozen articles written about it every day. I could spend my entire life analyzing all this news and still have no idea where the stock is going because the chart looks completely random and there’s too many people playing it from all different angles. Avoid.

f.png

Level 3 Communications (Nasdaq: LVLT), $3.19 is a guessing game here. The stock got crushed last month with a horrible quarter and now everyone is trying to guess whether management can pick up the pieces. Whether long or short, there’s a ton of smart people on both sides of the fence—I won’t pretend to say which side is right. Avoid.

lvlt.png

E*Trade Financial (Nasdaq: ETFC), $5.44 is the biggest guessing game in the US stock market right now. Sure, it’s gonna bounce and dip, but there’s literally no way to be able to have any kind of edge either way. Same principles apply here—too many opposing viewpoints, too much trading volume and too much news coming out every day. Avoid.

etfc.png

RF Microdevices (Nasdaq: RFMD), $6.16 has tried to spike off the low $6 range for the past six months, but it just can’t seem to hold its gains. Judging by the price action, I’d say short it, but earnings estimates are rising and the stock is somewhat cheap here. Avoid.

rfmd.png

Novell (Nasdaq: NOVL), $6.38, is trying to use the popularity of Linux to boost sales, but their stock has gotten crushed lately. I normally like to buy into such panic selling, but this same kind of action happened just two months ago, which used up a lot of the dip buyers. No edge possible here—avoid.

novl.png

SEC General Warning: Sykes has no positions in any of these stocks, but reading this commentary may be dangerous to your investment health.

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  • MikeY

    Glad I didn’t have shares reserved for this one!

  • bestdeception

    Anyone holding overnight?

  • YoungGunz

    Looks like I am riding this out till tomorrow. hoping for a gap down and a panic to get out.

  • be-the-ball

    shorted at 3.2 covered at 3.3

    lost $100, be sure to add that to your testimonials Tim ;-)

    was a low probability of success play. If I hadn’t had to call in to AMTD would have made a couple bucks instead of losing

  • mbaugh

    i’m holding overnight. POS company.

  • http://www.test.timothysykes.com timothysykes

    QTWW from morning watchlist is the perfect afternoon fader, chose the wrong horse!

  • bestdeception

    FWIW, I see it confirmed that they will release earnings on the 14th, so Thursday, but I can’t find a time anywhere.

  • http://www.test.timothysykes.com timothysykes

    btb, this was not a low probability play, it was just a safe trade…and i will add u to my testimonials, i cant help u if u have a crappy broker! and the beautiful thing about playing it safe is being able to get back in..

  • Reaper

    I covered for a $44 gain. Considering my situation I should’ve stayed in it (I have plenty of equity to ride out the bumps). OTOH it will be nice to just sit back and relax tonight and savor my big gains from today on GFET and AMED (and no Tim, you can’t take credit for me banking on AMED; I’ve been shorting StockLemon stuff since before I’d heard about you, and I was already short when you posted about it). Still a good day, even though I closed by AMED shorts $4 too high.

  • evanmost

    Shorted a little too late at $3.15. Covered at $3.31… Lost $38 with commissions. I’ll get em next time…

  • Mark

    Once again, Tim covers early and the thing keeps tanking big time over the next 1,2,3 days. I’m holding overnight for sure.

  • milingz

    shorted 3.20 and covered 3.25…cant win em all!

    not worried at all

  • be-the-ball

    tim,

    i have 3 brokers, just didn’t feel like dealing with TOS for this trade. my fault for being slow.

    you said it was a riskier trade. I was just paraphrasing you.

  • http://www.test.timothysykes.com timothysykes

    mark,might be early, might not, this is different cuz we know there’s gonna be news….as i said in the title, i played it safe…and remember this thing is still up on the day–thought it might fade all the way but it didnt…that opens the door up to gap up tomorrow…

  • bestdeception

    A late afternoon squeeze it looks like. Pushed it up in a hurry.

  • Ross

    Looks like I am in overnite. I tried to cover @ 3.4 but was too late.

  • YoungGunz

    Yeah I got the fuck out at 3.45. went to hit the button at 3.35 and the fucker jumped right away. just under a $100 loss after commissions for me. Oh well better luck next time.

  • Reaper

    I liked Timmay’s idea and shorted a bit of QTWW @1.98 at the bounce before the close. Not an ideal chart, but I like the possibility of a gap down tomorrow AM.

  • Mark

    APII 3.45. Nice work Tim. You cover and everybody covers. It’s up so much. Any news should be priced in at this point. We’ll see tomorrow I guess.

  • http://www.test.timothysykes.com timothysykes

    actually very few covered mark, got 400 subscribers now…and they should all know my exits suck….earnings news is rarely priced in

  • Getshorty

    Tim, holding 1500 apii overnight for one reason. It looks like an almost perfect evening doji star, and the fact are not coming tomorrow but the day after. should not have a surprise for tomorrow.

    Of course, I can be wrong as well

  • NXC1978

    Not all subscribers were ever in on the trade to begin with.

  • patelt78

    $135 loss for me. My entry was bad.

  • Cashiuus

    Haven’t funded my TOS account, so missed out on this one, but i’m agreeing with shorty. If I were in I’d go overnight. This thing looks like a giant bubble, someone grab the needle. Gap up at open isn’t impossible, but I’d shoot for an early dive and catch the range.

  • schmuck

    yes an evening star plus stochastics at overbought levels

  • http://www.test.timothysykes.com timothysykes

    methinks u guys are gonna get a lesson in how far these things can runup–stock finished up big on the day, 6 cents off its highs and its got earnings coming up…no friggin way is there a high probability of it tanking tomorow, let alone tomorrow morn

  • http://www.test.timothysykes.com timothysykes

    LOL using stochastics for penny stocks is just funny

  • Mark

    Just glad you didn’t call me a %&$#ing idiot?

  • Mark

    I’ll make it fall. I’ll buy in the morning. That should do it.

  • Ross

    I tried to get out. After everyone covered it went up too fast for me to try and cover. Hopefully I can get out in the morning without loosing my arse.

  • Ross

    My mistake was to float so it wouldn’t get scooped up too fast. At least it looks like it is going down after hours.

  • PCola

    Hey Tim, check out covestor annualized return:

    1 TimothySykes [3532] 1,337.34% (67.11%)
    2 PCola77 [3] 619.01% (152.41%)

    Just in time for me to not be able to trade anymore after this week… Don’t suppose you have six figures to pay an Excel monkey? :D

  • Getshorty

    I don’t use stochastics, but I do use candles, basically because u say in your dvd that “you have to learn Technical Analysis” and that you recommend steven Nison Japanese Charting Techniques.

    I get that penny stock manipulation can be stronger than traditional patterns, but the market psycology behind that doji (it couldn’t close above the open after a gap up) but you are right that these may be second to the market manipulation.

  • astaluss1

    it looks down in after hours.. is this correct?

  • Getshorty

    Yes it is down, but it doesn’t mean shit (I wish it means something, it may be that the late run up was just a bunch of scared shorts, but that is just a hope)

  • PCola
  • mbaugh

    Listen up people, if by some miracle the stock gaps up huge, don’t cover, just add to your short, this POS will come down, this is a fuckin toy company. The recent chart pattern indicates manipulation since it keeps going up every single day and when they do release earnings it may pop up some more, but the buyers from early on will surely dump into the run-up. Also for you folks that are nervous if you cover right away in the morning then yes you will cause a gap up which might bring in new buyers. I’m adding to my short if this POS goes higher. I can wait it out.

  • Getshorty

    That’s right, oh crap, It is gonna get hard to get some sleep tonight.

  • Getshorty

    mbaugh, 90% of the stocks we discuss here are consistent with your description, it is almost the definition of penny stocks. The problem is that the stocks we discuss here can multiply there value several times until the biggest fool buys it. in the meantime shorts get squeezed and loose their shirt. That is why we discuss the price action here, not whether it is a crappy company or not, but you are right it is a crappy company, but you are wrong, it can keep on going up.

  • Getshorty

    Oh Crap, it is not a evening doji star until after it gets the black candle into the previous day white body confirmation.

    http://www.hotcandlestick.com/directory/Bearish%20Evening%20Doji%20Star.htm

  • mbaugh

    Getshorty, I understand what you’re saying, but i stand buy my conviction that this turd will sink soon since all the techinal indicators are way overbought, and yes you can use the techinals on these POS companies even if they get over-extended like this turd. I would be worried if the techinals weren’t so overbought, but in this case its way overbought and profit-taking will happen soon. Also, I believe it will go down before earnings since who would want to risk all the profits. This trade was screwed up towards the close since Tim and a few others covered.

  • adairjm

    I use TDA…and couldn’t reserve APII. They said I had to call it in and do a broker trade. I’ll be changing to a direct access system soon….screw TDA and the broker crap.

    Once again investorslive is right on! Bought LZB at 8.15 on the opening dip and it closed right at the HOD! His longs plays have worked great for me the past three weeks. MNKD, LCC, MBI, and LZB.

    Good thing since the no good shorting plays have come up around here.

  • Getshorty

    I hope there is a god and that he listens to you mbaugh, he knows I and my 1500 shares want this company to tank tomorrow….

  • Getshorty

    To be fair, I have to say that I shorted 500 shares at 3.22 (was in a meeting when the alert came out) and the other 1000 at 3.14, when I thought it was tanking. If I should entered in the hig 30s I would have exited a part of my position at a profit. So this was still a good call, just tighter than usual.

  • http://www.test.timothysykes.com timothysykes

    mbaugh never have conviction on anything, trade scared…ever think the long trade mightve been screwed up by me and my peeps shorting? accept all angles or experience severe losses. u could br ight and it could go down, but so it could also go higher…i hope it goes higher, a.) to teach u a lesson to respect price action as i do and b. so i can get a better short entry price!

  • Getshorty

    I respected the price action, that is why I decided to close the short position if it turned into a white candle for the day, but it didn’t.

    Because it couldn’t close higher than the open(well, it could, but one cent difference is still a doji), looked like buyers couldn’t get a hold of the action for the day and decided to stay short.

    Of course I trade scared, I have no conviction and am trying to find the high probabilities plays, according to the technicals that I have been spending time in studying as of your recommendation, this doji star is bearish, however i screw it in the sense that it is not complete until it is followed by a black candle.

    I am trying to get my head about this apparent contradiction between what you say and what the book that you recommend says.

    i am not trying to be proven right or wrong, I just want to get this concepts around my head, I am studying technicals with the books you recommend (technical analysis using multiple timeframes, Japanes candlestick charting techniques) and re-watching over and over your dvd. I want to understand this thing, and no, I don’t want to get slaughtered tomorrow to learn a lesson I should learn for free(well, not free, I have spent countless hours going over material and have spent over $500 in your dvd and these other books). But if I get slaughtered or not, I would still not be sure what went wrong if any other that not waiting for the black candle confirmation.

    damn, this post is almost as long as tommy tim’s or big jim’s, hope most of you just scrolled it down.

  • http://www.test.timothysykes.com timothysykes

    exact close doesnt mater, it closed up on teh day meaning the momentum didnt break. u really wanna short a stock thats up like 20 days in a row with no momentum break? u guys really gotta look at these plays more lik pendulum and stop caring exact entries and exits

  • Getshorty

    Makes sense now, guess the black candlestick confirmation and you waiting for the pendulum to swing the other way are both the same thing.

    Hope this lesson doesn’t turn to be too expensive, from now on would think with the pendulum logic and using patterns for confirming.

  • kelvin

    just chech on yahoo board. Someone said some guys bought after we shorted to force short to cover .
    And what’s the greenonthescreen chat room?

  • notesguy88

    I didn’t join in this trade. I was out most of the day and when I got Tim’s alert to reserve apii shares I was having a nice lunch with my family. Then when Tim sent the alert that he shorted 2k shares, I was already watching “Dark Knight” in the theater. LOL

  • Mark

    Tim, You’re haters are whining about you on Yahoo. They need to think about it. How many people do they think were trading along with you before timalerts? A lot more than 400 probably for sure.

  • JoeBraxton

    Hey Tim what do you think about NLS

  • TonyEllis

    Think going long APII in morning is good idea?

  • TonyEllis

    BESN…Think this one will tank?

  • astaluss1

    who thinks holding short all day tomorrow and guessing this stock has been going up only because some pro trader knew somehow that the earnings are going to suck…?

    im thinking better risk then loosing 600 bucks+ wednesday morning…

  • TPA_Trader

    I am new to Tim Alerts and still going through the DVDs. When the alert was sent showing Tim entered at $3.40, did he enter due to the volume as the chart shows there was downward movement at the opening of the market and around 10:00ish.

    Thanks,

    TPA__Trader