TIM $12,805 ( profit of $420 on the day)
Overall markets flat–a lot of bearishness in the morning turned into bullishness by the end of the day=boring. Potential plays from yesterday :
VDSI, WIND, NUAN, SCON, CRDC, CROX=boooooring, no worthy plays whatsoever, still watching all of them…LULU surprisingly put in little effort to bounce, look for further weakness and I’d like to buy under$40 (
hopefully we get some panicking, but I doubt I’ll be that lucky)…SYNA=very good late day strength, I’d love to buy it, but it’s pricey and my tiny account is hindered by the Pattern Day Trading Rules; only buy on a breakout of $61.72, preferably a gradual rise as a spike could indicate a double-top.
TNRO= boring, MXOM=up slightly (but not enough to make it worth TIM’s wHile), CCGY=failed breakout attempt, NNRI=spike and fade (would’ve been a good gap play), TWRT=spike and hold, should continue to be a good mover, wish I could short it!
CYGT showed some nice volume throughout the day, its .005 cent stock price gain means $250 in unrealized profits for TIM= nothing to get excited about, but more importantly, the bid rose from .06 to .08 meaning I can sell and breakeven (probly couldn’t sell my entire position though). Still a waiting game for the IAAPA conference next week…
The main plays today obviously dealt with the Alibaba IPO hangers-on=BIDU, GSOL and SOHU. Since I look to play the most volatile stocks, GSOL’s multi-point gap-up (compared to fractional gains for the others) made their stock my prime target.
I went in with the thesis that this stock had runup over the past few months all on Alibaba hype, hype that is now over. Sure, they have a decent little business, but the stock is rather expensive with a forward PE in the 40 range, while only growing at 20%/year. Sure, Alibaba has a ton of cash and might buy them out, but not this week and definitely not today. And, out of these 3 stocks, GSOL is, by far, the weakest performer so the opening price strength looked like an early Chanukah gift for me! TIM Lesson: I’ve shorted thousands of lesser quality companies like this nd I know that hype can help them perform better than quality companies so short selling into that hype is surprsingly more dangerous.
Since TIM is so tiny and GSOL relatively a pricey stock, I knew I couldn’t short more than 100 shares so I bided my time at the market open and waited. But, my usual impatience got the best of me and I entered in my short sell order at $36.67, afraid I was going to miss the bear party. Luckily, this stock was hard-to-borrow at Thinkorswim and my order was rejected. I immediately started chatting with their live help and discovered I had to contact them before trying to short sell hard-to-borrows. By the time I put my new order in, the price had risen $1/share and I wanted in ASAP.
I sold my shares short at $37.67 and cringed as I watch the price spike another $1 higher within a few minutes. Idiot. I felt relief that my position was so small as who knew how much higher the stock could go (it was up $4 now on the day). But I wasn’t very worried because BIDU, SOHU and the rest of the China gang weren’t doing much of anything and actually seemed to be losing momentum. I thought about doubling up, but this 100 share position already represented 30% of TIM assets – already exceeding the percent I wanted because I promised myself to set a good example for everyone watching (so much for that!).
Luckily, within a few more minutes, BIDU and SOHU both went negative on the day and everyone seemed to realize that the Alibaba hype miht wear off rather quickly. BIDU suddenly tanked $10 within a few minutes and GSOL followed suit, dropping down to $36.60. I thought about taking easy profits of $1/share, but it’d only be $85 after commissions. I decided to wait and hold, but after another quick drop to $36, I bought to cover, glad to take my $1.67/share in profits in 30 minutes. The price was in freefall so I actually bought to cover at $35.83, a nice $184 gain, and $170 after commissions. Not bad. good start to TIM.
GSOL gradually trended lower throughout the day and I felt somewhat guilty about covering too early, not only because of the $100 or so mor eI would’ve made, but because if I held overnight, it wouldn’t be counted as a day trader and as it is now, I can only do 2 more day trades in the next 5 trading sessions (since I’m below the $25,000 deemed to be necessary to trade so speculatively so often).
Gotta get over $25k so I can start trading the way I like! Holding CYGT I think will help me get there quicker than these $100-$300/ daily gainers.
(just signed up for Covestor so all my trades will be verified)
Disclosure: Timothy Sykes and TIM only have positions in CYGT, nothing else!
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Posted in TIM Lessons