TIM $14,445 (up $109 on the day)
Shorted 300 RCH @ $10.46, covered @ $10.03
No Overnight Positions
Another succes
sful day trade and yet I wish it hadn’t tanked so quickly and scared me out of my position. This thing has single digits practically written all over it, but a near risk-less 4% gain within 2 hours…c’mon, I had to take it. After all, I’m working my way to the magical $25k level, the mark at which the SEC has determined small investors are entitled to investment freedom.
So, let’s get to the details of this trade—this was the latest example of the kind of worthy trading opportunity as detailed in my DVD. (Sorry to constantly bring it up, but if you truly want to learn how to profit form these types of trades, my DVD is really the best way to learn. As detailed as my blog will become, it really helps to have a big ass 220-page instruction manual and 6 hours of me using my big mouth to go over ALL the variables). I’ve covered RCH extensively on this blog, but never played it until today because this website is really helping me stay disciplined to trade only when all the variables are aligned. And, today, RCH showed me a perfect breakdown as it couldn’t even stay positive with positive looking news this morning and a strong overall market.
Typically, I like to short strong stocks when they flatline / go negative on the day, but RCH is much too stubborn for that. It’s only up from $7 so I wasn’t expecting more than a $1-$2 pullback (normally I like more downside potential so my timing doesn’t have to be perfect) and as you see in the chart, it has based in the $10.50 range a few times over the past few days. When it cracked $10.60 straight to $10.30, only to bounce back to $10.60, I knew I should short. The $10.60 level, which used to be support on the downside now became resistance to the upside, so I tried to get my short as close to that as possible. But, RCH being an AMEX stock, had a ridiculous 12 cent bid/ask spread so at 2pm, I shorted as best I could in the $10.45 range.
It bounced around for an hour or so, but the support was clearly broken so this bitch could howl all she wanted, she was going down. Once it took out the $10.25 low, it was the ballgame and the only question was whether it’d take out the probable bunch of stop losses at $10. Nope, big buy order at $10.02. Damn. Two minutes before the market close, I put in a day order at $10.03 just in case I’d get it. I’d hold overnight for a probable gap down or take a decent profit—nice hedge when you’re confident in your short. 30 seconds left, my buy got taken and I was out. Sure, single digits are probable tomorrow, but why risk it? This is a stock that loves to spike, 4% profit in 2 hours is fine with me.
SEC Fun Label: Bite Me
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