CHATROOM

How To Play These 4 Recent Winners That Are Waaaay Off Their Highs

December 8, 2007 at 11:24 am
by Timothy Sykes

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Krispy Kreme (NYSE: KKD ) is a perfect example of how not to run a business aka how to run a brand name into the ground. The stock hasn’t seen double digits since early 2007 and at $3.47, it’s more than 90% off its all-time (in 2003) highs. Revenues are down, franchises are closing (probably the result of a flawed business model that requires them to buy supplies at inflated prices so the mother Krispy can profit from the

ir existence) and losses, while narrowed, are continuing.

The good news is the stock surged 27% after their recent earnings report, so maybe all the negative news is priced in. Hey, you gotta like the fact that international franchise growth is surging, but let’s just wait and see if this recent surge can continue before buying any shares. All we can be sure of is that it’s not a short.

Jamba Juice (Nasdaq: JMBA ) is another name brand company whose stock has been in the gutter. Despite big name investors and some great tasting smoothies, at $4.48, it’s off its $3 low, but also waaaay off its highs. Their surge is due to a little deal with Nestle that will put their drinks in grocery stores and while it could be important, right now, people are just excited that there’s finally some good news here. This company is a notorious underperformer, I’ll be looking to short , ideally, in the $6-$7 range (c’mon you eternally optimistic people, buy some more shares!)

Imax (Nasdaq: IMAX )’s stock chart isn’t as ugly as those other two, but it’s nothing to be proud of. Yesterday, they signed a deal with AMC that’s a serious vote of confidence for the company’s technology and the rightly jumped 58% to $7.32. Do not short this stock—you might make a little scalping it on any pullback, but this is a fundamental changing event, which usually signals further strength ahead.

I wrote about CMGI (Nasdaq: CMGI ) the other day, so hopefully some of you actually listened to my bullish call—I certainly didn’t! (I imagine IMAX will make a similar move.) I don’t think the run is over for CMGI, but now that’s up a bit off its lows, it’s risky to buy here—I’d prefer to buy this on weakness.

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  • nojobmaui

    WIll the news of the SEC probe effect UAL? I know its not a penny however its trading low and its bad news

  • nojobmaui

    Hurricane plays? Tim you mentioned IPII and TAYD during Gustav, any play?

  • acerockolla

    Can someone explain how not finding shares to short would indicate a short squeeze rather than genuine short selling pressure?

  • Dan000

    Noone else can find shares to short either = no selling of the stock = keeps going up.

  • TheParadox

    ace – when hard to find shares of something like COIN are “impossible” to find (none at TOS, IB, GS, OX, ect…) it means everyone has asked to short, borrowed, and probably gone short… thus with a high amount of shares short, any buying pressure will put pressure on shorts to cover, and thus propel the stock skywards, like COIN yesterday. think about it, the PR was sent out while short interest was sky high! If you look at COIN closely and you’ll see a short fest followed by a nice hike back several times back to 6.70… this pattern shows lots of short selling and little longs selling, followed by a lot of covers causing the squeeze… as the price “fits” in a band fairly well, not a lot of actual longs left, or an equal amount of new longs joined while others left.

  • TheParadox

    @ TIM:

    “some TIMalert peeps bought and sold [COIN] for nice profits…”

    lol, um… by “bought and sold” did these peeps… go LONG?! Just funny knowing how often you go long, you’ve almost forgot it exists.

    went long on COIN from 7.37 to 7.77 or 40c / 1k shares / 380 profit after comm. I do admit, it has been easily a month and a half, maybe even longer since i played something long… and it felt awkward.

  • YoungGunz

    I would think if he says they bought before they sold that he is assuming you would interpret that as a long play since you can’t but first if you’re trying to go short :)

  • tbohen

    No COIN at TOS

  • YoungGunz

    Yeah same here…bummer for today. Thats OK like Tim says it will just make for a better squeeze today and short for next week. I did get 300 BBND just in case.

  • YoungGunz

    I swear if I leave my thinkdesktop application open over night I don’t get a quick response from livechat. As soon as I close it and restart it someone shows up immediately.

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

    no COIN but got 1100 COINW reserved at thinkorswim

  • Getshorty

    DAMN !!! have woke up 4:00 am in the morning and pissed of my wife to reserve COIN and there are no shares !!

    Would have went short yesterday on TOS and long on IB to offset, but a stupid daytrade yesterday in IB doesn’t allow me to use my IB account until Monday. Don’t you dare to fall today COIN. TODAY IS $10. SPREAD THE WORD. THOSE CRANBERRIES THAT USE THE COIN FERTILIZER ARE THE BEST EVER !!!! PERIOD !!!

  • Getshorty

    No COINW now, looks like you got the last ones.

  • be-the-ball

    100 shares of COINZ at IB. zippadeefuckindoodah

  • Reaper

    No COIN at Goldman either. Errgh. The one dude who has Sogotrade is in luck, though — COIN is on their easy to borrow list.

  • Reaper

    Chatroom for today is #therebenocoinhere on Mozilla.org.

  • YoungGunz

    I asked for COINW when I asked for COIN and Ira shot me down. That was 5 mins after they opened.

  • master_wally

    Any impressions on how much more downside PCYC will endure? CEO, CFO and 4 directors all resigning.

  • Reaper

    I just shorted the last 6k shares of COINW at IB and went long against the box for those shares to reserve them but have no net position.

  • be-the-ball

    asshole reaper, i was just about to do that with some shares at IB, took them all you greedy bastard

  • schmuck

    reaper how did u reserve shares at IB? is it similar to TOS?

  • Getshorty

    When did the PCYC CEO, CFO ad directors resigned?

  • be-the-ball

    he didn’t reserve them schmuck, he went long and short.

  • schmuck

    oh ok…but why would he do that?

  • be-the-ball

    only way to hold shares. he will sell the long when he wants to be short

  • schmuck

    ok i suppose that is another way around it…but i just got off with an IB representative, she told me that when he does want to short later that there will be no guarantee that the short will be executed

  • Getshorty

    Thats the point schmuck, you are long on one broker, short in the other, you are neutral, (stock moves you loose $200 on one account and make $ 200 in the other). Then when you want to short, you sell your long position, and you end up with the short net postion.

  • Getshorty

    COIN, bought at 8.24 sold at$8.51 (after seeing it go to $8.70 to $8.24, for go’s sake I just wanted to have a peaceful breakfast)

    CHCI bought at 0.51 into yesterday’s close closed today at 0.61 (after seeing it go to 0.43)

    SHort MITIat 5.65, will get out if breaks highs

    Long FNET, looks like Supernova on the works…oh wait…… it actually has earnings….. nevermind, but is cutting through new highs like butter.

  • Getshorty

    Forgot, long SOLR yesterday into the breakout at 9.06, it’s been a ride in the morning.

  • jeepee2008

    man… no trading for me today, been condemned to the sidelines by this stupid SEC daytrading rule… Is there a way around this? apart from filling up your account with 25k?

  • Getshorty

    Yes Yeepee,

    Option 1: move to Canada and open an account with TOS Canada
    Option 2: Open an IB account and a TOS account, then when u want to close a position that you opened the same day, you offset it with the opposite position on the other account, and close both the next day (more commissions, to use only in worthy circumstances)

  • jbarwick

    I am new to the shorting game>>> Can some1 please tell me how to reserve shares to sell short??? I didn’t know you could reserve shares. Can some1 please help me here thx

  • schmuck

    thanks for the explanation getshorty…too risky for me though, as u hv to make sure u manage to get the same amt of shares at the same px…not to mention slippage and txn costs

  • martinm

    I’m looking for a brokerage firm that doesn’t charge me a fortune to trade stocks under a dollar. Has anyone found something that they’re happy with? thx.

  • Getshorty

    No extra risk at all if you short first and then offset it long. (not hard to manage, you press the buy buton, period)
    No extra tax because gain because loosing account offsets winning account gains.

    Only way arounf with really hard to short stocks, couldn’t do it today with coinw since my IB account is pattern day trade blocked until monday.

  • Getshorty

    martin

    InteractiveBrokers

  • jbarwick

    can some1 fuckin answer my question plese: I am new to the shorting game>>> Can some1 please tell me how to reserve shares to sell short??? I didn’t know you could reserve shares. Can some1 please help me here thx

  • Webster

    Wow nice way to ask the question. Good Luck

  • Getshorty

    here is your fucking answer, open your fucking chat with your fucking TOS representative, if you are with other broker, you are fucked.

    Hope this answer your fucking question

  • AdamN

    Or……Read the Fuckin Blog! All these Newbie questions are answered in a handy little section cleverly disguised as “BASICS”

  • Reaper

    LOL getshorty

  • nojobmaui

    short 1100 bbnd @ 4

  • schmuck

    getshorty…in your scenario u said u short first…then by the time u want to do the long leg, the stock moves, and u cant get it at the same price…how is this not a risk?!?! Only if u can execute both transactions at exactly the same price and the same amt of shares, then it would be considered ‘risk-less’. Just trying to warn folks here that it is not as ‘risk-less’ as u make it sound.

    i didnt say there is extra tax…txn costs mean transaction costs

  • Getshorty

    whatever, if 2 seconds is risk for you, then penny stocks are way too risky for u.

  • Dan000

    TIM, others, thoughts on HA, and FNET.

  • nojobmaui

    low volatility fnet mmay be difficult to get in and out

  • jbarwick

    wow , bro ur way too cool man… ur dfinately the most intelligent here

  • jbarwick

    i just asked i simple question and everybody ingores it so how am i suppose to ask it if every1 keeps innoreing it bro..

  • martinm

    Don

  • Dan000

    jbarwick this isn’t a newbie question answering service. If you’ve ever used the internet, ever hear of google? Well look at the first fucking reply to your question in google http://www.google.com/search?q=reserve+shares+think+or+swim&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

  • Getshorty

    Closed Miti at 5.78, now at 6.00, may go long if it gets solid over 6.00

    No job may be right on the low volume of FNET, i still traded it because of the tight spread. bought 6.26, out at 6.56, got too quiet, like the calm before the storm, so I chickened out with my $ 90

  • Getshorty

    Actually that’s how I found about Tim, subscribed to Doubling Stocks.com to short after the runup, but had a hard time finding the shares to short, I googled “short penny stocks” and ended up in test.timothysykes.com

  • Getshorty

    Some serious squeeze on MITI

  • Getshorty

    MITI target price raised by RBC

  • tamimkhan

    long the coin baby

  • tamimkhan

    8.74 long coin mucho profit overnight

  • tamimkhan

    Long LEH at 3.50

  • Getshorty

    Good luck with COIN. I didn’t have the nerve, sold it at a small lost from 8.79 to 8.66 as the brutal over $9 squeeze I was expecting didn’t happen, made me nervous about any news on the weekend.

    Have a nice weekend