CHATROOM

SkillSoft (What You Should Not Try To Short Sell)

November 26, 2007 at 5:46 pm
by Timothy Sykes

Watch these 7 free video lessons on how I became a millionaire

Buddy: Hey, I’ve got a short pick for you

Tim: Cool, what is it?

Buddy: SKIL

Tim: Whaaaaaat?!?!?!? It’s a perfect breakout and it’s due to solid earnings, the single worst combo for short selling

Buddy: I just don’t think it can withstand the volume

Tim: Do you mind if I blog about this? It’s a great les

son to be learned by all.

Buddy: No, I don’t mind.

 

Skillsoft (Nasdaq: SKIL ), a $1.1 billion maker of educational software, here at $9.92 is not only a horrible short, it’s a great buy for the patient investor. I mean look at that chart—this is a textbook multi-month breakout (of $9.40) and their earnings report, while not an FSLR-type blowout, beat analyst expectations (earning 6 cents/share vs. expectations of breakeven and they raised full year guidance).

skil.png

Normally, I like to short into strength—the key being I short into weak stocks exhibiting excessive strength (see ASHW, CC). This is not a weak stock, so you must respect this breakout and not fight it. In fact, I particularly respect how this stock got stronger as the day went on and managed to hold onto its gains in the late afternoon. If you’re a long-term investor, you may think intraday price action irrelevant, but on an earnings day, it’s particularly important.

Now, this stock is by no means a steal here—it’s got a PE of 30 and their growth rate is about half that—so conservatism is required. It’ll be interesting to see if it can hold this breakout—given a possible market panic—and if it does, I’ll be even more bullish (long-term, of course).

Disclaimer: No position

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  • TheParadox

    hmm, no lbas… lbas looks great, and im a little unsure with pdrt…

  • lamecoder

    Paradox, you still tyring to setup a chat, or did you give up.

  • kusumo

    Since that IRC chat didn’t work out, I setup one on a new website. Go to http://www.pennystockchat.com and click on “chat” on the right. Also, I’ve been wanting to keep track of everyone with a Covestor account so it’d be cool if you guys could post your Covestor link in a comment on the latest blog post (which is about Covestor).

  • lamecoder

    I have to register for that? Is that your website? Is it protected so only TimAlert subscribers can enter?

  • kusumo

    It is my website and I made it last night. The only ones that know about it are TimAlert subscribers. The only reason I am requiring registration is so people don’t come on there randomly pretending to be someone else and that has a potential to be bad. Registration takes only a minute. However, if I get enough feedback to just skip the registration I will do so.

  • lamecoder

    Yeah but besides for the site address only being know to timalerters you should protect it so there is a password or something that only subscribers know about. Unless you are planning on having more users.

  • notesguy88

    The irc didn’t work out?? Some of us are at the irc chat right now.

  • lamecoder

    How do I get on the irc?

  • notesguy88

    http://www.mibbit.com

    connect to irc: mozilla.org
    channel: #redcandlestick

  • TheParadox

    hey, everyone, the new IRC channel is #9Wannabes on moznet or Mozilla.org via chatzilla or mibbit.com

  • samsalmanu

    paradox (or anyone).. rgdg SOLF STP .. did tim mean that its mostly on the way up and shorts shud get out ?

  • mrlloydum

    Yes, SOLF STP on the way up. Don’t short now.

  • samsalmanu

    Are all of ya in the chat?! I cant access that from here :-(

  • http://www.heyidea.com Sweeney

    Long VPHM 1500 @14.2

  • lamecoder

    15 users in chat right now

  • bigjimstradingpost

    Shoot, I remember playing VPHM a few years ago for $1.60..something about a flu vaccine that was going to revolutionize the industry. Guess I shoulda held and not scalped…NOT!!!

  • Lance03

    so what chatroom is everyone in?

  • bigjimstradingpost

    new IRC channel is #9Wannabes on moznet or Mozilla.org via chatzilla or mibbit.com

  • das317

    F four!! Bought at 2.85, bought more for shits and giggles at 1.60, sold part at 1.90 and part at 2.35 for $1K plus loss. Now hit 4+!! Had a feeling that was going to happen.

  • Gertsomething

    damn das317 :-(

  • samsalmanu

    its sad that we are not getting the updates from some of the usual suspects since they r all in the chat .. (which I (and some others i guess) cannot unfortunately get into … :-(

  • samsalmanu

    das317 .. i knw the feeling .. ouch !

  • mrlloydum

    OK I found them at http://www.mibbit.com #9wannabes thanks.

  • adairjm

    Took starter short in MITI at 6.70. Lotsa support at 6.55 and 6.51 however. If it starts to crack that will add more. Will cover if it pushes past HOD.

  • Gertsomething

    There it goes adairjm…for a little

  • adairjm

    Yep…sold off at 6.55 too fast. Couldn’t add.

    There’s another wall at 6.45. May add there if there’s selling pressure.

  • kelvin

    MITI looks like it’s gonna down more

  • Getshorty

    As we speak, MITI is on its opening price, looks like the rally is struggling.

    YOU AIN”T FOOLING NOBODY, GO SQUEEZE YOUR GRANDMA !!!!

  • samsalmanu

    what abt FMD? is it showing support around 3.5-ish?

  • Getshorty

    Looks like we are way too late to the FMD party dude, plenty of support around 3.30 (open window) can squeeze to 4.70 in a blink.

  • Getshorty

    STAA going down…. DIEEE !!!!

    If it breaks 4.69 its money on the bank (if not, is money I’ll own to the bank)

  • adairjm

    Tried a rebound play on FMD yesterday. Only scalped 15 cents long.

    Still holding MITI short. In at 6.70. Looking for it to chip away at the support wall at 6.45 (50K shares). If so, could be a good afternoon.

  • samsalmanu

    thinking of a rebound on FMD .. wondering if the squeeze will happen though ..

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

    relax little hyenas, pallian and i are desgining a next generation chatroom, gonna blow everyones minds when it debuts in octoberish

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

    c’mon u lil bitches, none of u bought FOUR at $3.20ish and sold for 50-75 cents/share???? r u serious? its friggin 2am here in japan and it looks clear as day, sorry i needed 2 hours sleep so i missed that breakout, not that it woulda mattered cuz i woulda been blamed as a pump and dump if i bought at 3.25 and sold at 4 so kinda glad i wasnt around to alert…..EVEN THOUGH I FRGGIN TELEGRAPHED THIS MOVE IN THIS PREMARKET WATCHLIST!!!

  • Getshorty

    “I

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

    heads up:

    13:35 PROFX Food Technology Service (VIFL): color on move higher (2.75 +0.80)

    Food Technology Service (VIFL), which provides irradiation services for food items, is up 40% today. The move is apparently in reaction to an AP report that the government will allow food producers to start zapping fresh spinach and iceberg lettuce with just enough radiation to kill E. coli and other dangerous germs.

  • N.miz

    i bought 2000 FOUR at $3.13 sold at 3.50

  • Getshorty

    VIFL looks like if it breaks three is good to go

  • YoungGunz

    “watch fro breakout of prior high at $3.15-$3.20ish fro potential run to $3.50-$4, but obviously shorts could just be luring buyers in to pound em later

  • Reaper

    VIFL’s a superman pump.

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

    glad to hear it nmiz…

    in regards to FOUR, i post best guess before the market opens, no way should u stick to my guesses, if price action confirms thesis, ignore everything is ay and jump in…my watchlist is meant to alert potential setups, this was one, was actullay right not to buy the first spike today, but 2nd spike was nice, so even if u got in late like 3.50ish u’d be good

  • YoungGunz

    so which way you looking to play VIFL? looking for a continued breakout or a possible short tomorrow?

  • Getshorty

    Superman stocks tned to perform for a while before falling (NTIC, PDO)

    THink its safe to keep for a while.

  • adairjm

    Looks like the bid finally caught up with the ask. Oops, not any more. How the hell do you trade a 25 cent spread?

  • samsalmanu

    didnt quite get u adairjm .. can u explain ? (remember i’m a newbie ;-) )

  • adairjm

    VIFL

    The bid/ask is 2.92/3.08

    If you shorted it, you’re automatically down 16 cents if you decided to cover quickly.

  • YoungGunz

    the bids and asks for the stock are spaced out over 25 cents. the buyers are asking at a price 25 cents below what the sellers are offering to sell.

  • Getshorty

    Why would anybody short a stock that is on its first huge up day (33%) backed up by a superpumper. This sucks more buyers in before dumping it.

  • adairjm

    That’s what makes these illiquid stocks risky. Hard to cover if the trade goes against you.

  • samsalmanu

    okie. . got it .. thnx both of ya..

  • Getshorty

    My take is that there is short squeeze in the make at VIFl

  • adairjm

    Looks like VIFL is cooling off now. Bid is getting picked at a little more. Of course I need to do a broker trade at TDA to short it.

  • gil

    wasn’t hdlm a clean break out at 2.10???
    should have checked tim picks.

  • YoungGunz

    if you want to do a broker trade can’t you get the order started at like $5 then replace the order yourself later?

  • Getshorty

    Has anybody Superman, somebody call him, we need him to get to work !!!
    adairjm, I have developed a mojo “Don’t trade against Superman against unless you have truckload of kryptonite, and then some more”

  • gil

    Ha Ha
    that was funny Getshorty

  • Getshorty

    It is funny now, wasn’t that funny when i shorted NTIC

  • YoungGunz

    its starting to fade now though i think the momo is dying out.

  • Getshorty

    May be, either that or a short squeeze in the make, Superman style at its finest.

  • adairjm

    Well covered MITI for small gain. Will watch for better setup.

  • YoungGunz

    here goes VIFL falling 50 cents off it’s HOD

  • adairjm

    Yeah, VIFL would of worked well. By the time I called TDA it had all ready fallen 40 cents.

  • skogie

    Did anyone out there take a gamble and short VPHM? I shorted at 14.12. I’m setting a real tight stop but looking for continued downward movement over the next few days before getting out. Anyone??

  • Getshorty

    Don’t count it out just yet, previous spike in October had a similar white candle on the first big volume day, next day was a huge gap up.

    NTIC (other SUperman play) also came up for several days, the thing is, if you have accumulated shares of this things for a while before pumping em it takes more than one day to dump it, so meantime you keep pumping hard. More comfortable with long position here than with short.

    Tale from a guy who shorted NTIC at 14 and had to cover at 21.

    After that and seeing PDO going from $3 to $30 (so a stubborn short could loose $27 000 trying to make $ 3000) THere is no way in hell I’ll short a superman stock on its first up day.

  • skogie

    Did anyone else take a chance and short VPHM today? I shorted at 14.12 and set a real tight stop. I”m looking for more downside over the next few days and then I’m out. Anyone??

  • Getshorty

    Take a candlestick chart of VPHM and draw a trendline starting on July 21st bottom.

    The uptrend is intact, this dip may well be a good entry point for going long, If I were you I’ll cover first thing in the morning.

  • skogie

    I accidentally posted twice. Yeah, my stop is set so that much upward movement at all will take me out. Let me ask, do you think if the general market sags tomorrow that this could get pulled lower with it? I believe the indexes are at a point of inflection and the question is, is a stock like VPHM under the radar enough to avoid damage? If not, it’s fairly extended, I think and has room for downside action. I think Biotech/Pharm is overheated anyway and will fall with the broader market. But again…a risky proposition hence a tight stop.

  • Getshorty

    It is not overextended, it has a solid uptrend and is in the low part of its range.

    I may be wrong or right on my arguments, but you just sound like wishful thinking, trying to grab arguments to justify a position you have already taken, been there (quite recently) no good.

  • skogie

    You convinced me. I’m out. ;}

  • Getshorty

    Superman’s email just arrived 22 minutes ago( way after thursday’s market close). This thing is going to explode tomorrow, today is first day of super promotion, think about shorting after going exponential, not now, long for now, may add up depending on tomorrow’s action.

    Safe yourself a beating, don’t mess up with the superman

    Here’s the email

    “super-trades.com” – 1 new article

    1. New Buy VIFL
    2. More Recent Articles
    3. Search super-trades.com

    New Buy VIFL

    VIFL 2mill Float per Bloomberg. Did .05 EPS last quarter. In on FDA news today:

    [Ads delivered by FeedBlitz]
    FDA allows food producers to zap spinach, lettuce with radiation to kill food-poisoning germsBy LAURAN NEERGAARD | AP Medical Writer
    11:31 AM EDT, August 21, 2008
    WASHINGTON (AP) _ The government will allow food producers to start zapping fresh spinach and iceberg lettuce with just enough radiation to kill E. coli and other dangerous germs, a key safety move amid increasing outbreaks from raw produce.

    Irradiated meat has been around for years, particularly ground beef. But food companies long worried that zapping leafy greens with X-rays or other means of radiation would leave them limp.

    The Food and Drug Administration has determined that modern irradiation techniques kill food-poisoning germs without compromising the safety or nutrient value of raw spinach and lettuce. Its new rule takes effect Friday.

    From last Company PR:

    Food Technology Service, Inc. CEO Dr. Richard Hunter said,

  • bestdeception

    FWIW, I’m still short VIFL. Shorted at 3.00 today.

  • Getshorty

    Don’t wish you bad, but consider reversing.

  • Getshorty

    Just Chequed, VIFL Shares outstanding are 2.76 Million, today 2.44 million changed hands, so, if I follow, more than 90% of the outstanding stock changed hands today, talk about scarcity. Wouldn’t consider shorting it now.

  • yaktipper

    Or the same 100 lot changed hands 24,400 times.

  • Getshorty

    that would be even more scary, meaning that nobody else is selling….. buuuuuhaaahaaaahaaaa

  • bat711

    Umm, I think you need to check your decimal places. 244k volume ~10%.

  • bat711

    Still that’s 122x avg.

  • Getshorty

    VIFL 2500 shares changed hands at $2.80 after hours, must be painting, but it should help

  • Getshorty

    Has a not that crazy P/E Ratio of 28 considering its 18% yoy growth in sales. So there is actually some business going on that can be benefited from the approval….. never believe the hype…. BUT RIDE IT !!!!

  • Getshorty

    VIFL Has a not that crazy P/E Ratio of 28 considering its 18% yoy growth in sales. So there is actually some business going on that can be benefited from the approval

  • skogie

    Getshorty, thanks for the clear message. You’re right. I’m justifying a position and ego can really get in the way of trading. I’m out.