Breakouts And Breakdowns Galore, Brand These Charts Into Your Brains
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Last week they compared me to bigtime HF manager John Devaney, now Dealbreaker compares me to the SocGen rogue trader…what’ll those crazy kids think of next?
Check it out, a little sissy value investor tries not to be boring!
Lately, I’ve been comforted by not one or two, but several chart patterns that really exemplify the patterns I like to trade (although no true Supernovas yet). On the other hand, I’m still so bad at timing these trades while so good at recognizing them. Stranger still, this combination—which has been present throughout my decade-long trading career—has yielded millions in profits, even as I left millions more on the table.
Do I think I can improve? Yes. Does it really matter? No. Is it more fulfilling to help teach and profit from others learning because I know I’m doing good, blowing away all the BS scam artist/marketers out there? Yes. Is that why I now teach, write and publicize instead of focusing solely on trading? Yes. Do I think I can teach others to do better? Totally. Welcome to my rather unpredictable career path, I certainly never saw it coming.
Over the past few trading sessions, each of the top 4 stocks on my watchlist, IDMI, APWR, COIN and TITN—have displayed highly predictable breakout/breakdown chart patterns. I’ve screwed most of them up, but I know from emails several of my students of my DVD haven’t—guys, please post and brag about your gains to everyone you know and don’t know! Doubtful, probly wanna keep it to themselves…in any case, let’s use this post as a cornerstone, as you’ll all see, these patterns will repeat again and again and again…
Enough blabbing, bring out the charts!
Multi-Day Breakdown:
IDMI, correctly shorted this one yesterday at $3.23, but it was a random short—just thought it would eventually go lower, even though no trendline had cracked—so I had little faith in it, evidenced by me getting squeezed out for a 3 cent gain. Today, the stock got downgraded, and it got whacked, I knew $3 was the key level and pre-market, it was hanging around there, but I hesitated. Too scared of a potential morning spike, I failed to think how I had before “since this is such a POS company, I’d have no problem adding on the way up”—and when I made my big gain last time, it hadn’t even cracked any key level! Poor line of thinking to be sure…
So, when I saw it bouncing in the afternoon to $2.70, I looked to get my 2nd chance…shorting 1,000 at $2.71…I knew from prior intraday support at $2.80ish, that was resistance, so I entered early in hopes of it tanking quickly. Bingo, right on, perfect fade intot he close to day’s lows, but it couldn’t crack. I have morning meetings so I took my $150 profit, after commissions and said good-bye. Probably goes lower, but not by much, at least anytime soon…not gonna risk not being here for it and lots of intraday support in the $2.30 range.
Multi-Day/All-Time Breakout:
APWR, correctly bought 200 shares at $18.46 into the close yesterday on the intraday and multi-day breakout of $18.30, but a weak market open, weak oil, weak alternative energy scared me out, so I sold at $18.22, a $50ish loss. Good sell as it went down to $17.75 and shorts got confident it was a triple top. But a mid-morning spike brought it to $19…then basing…early afternoon brought $19.25…then basing…late day spike to $19.50. Now, I hate the way this stock breakouts, 25 cents at a time followed by hours of nothing, the nothing could easily result in a quick fall in price I’d be unable to stem, even with my stupid little 200 shares. Only thing I did wrong here was not re-enter when it took out $18.50 in the morning—big fat round numbers like that offer short sellers protection (due to usual large blocks of sellers there), when they go, short sellers get panicky and squeezes are likely. But who really cares, I missed out on $200, IDMI is much better for TIM as 50 cents there coulda woulda shoulda been $500-$750.
Multi-Day Breakout:
COIN, correctly bought into the multi-day breakout of $10.75 a few days ago but was cursed by negative after-hours news, selling under $10. Today, I saw a similar spike and the bad taste from the last trade prohibited me buying this time around. Same kind of spike, just some bad blood between me and the stock. Like a little baby, I held a grudge. The only good news here is that it was not a new all-time high breakout, which no matter what kind of grudge, I def. would’ve bought into. This is another true POS company, so I’m scared to hold it overnight, you never know when the SEC will come in and halt it—much like CAFÉ of old (readers of my book know what I mean)—this stock is surging upwards, but buyer beware.
All-Time High Breakout:
TITN, last but certainly least, because this is the only company that seems to have a real business. Bleh! With real business comes real valuation, aka less intraday volatility. (ex. APWR might move $5+, TITN limit is $1-2). This one had a perfectly simple breakout on anticipation of a high IBD listing. I didn’t play it, again, a little too high priced for me, thought it wouldn’t be that volatile and I can forgive myself for not buying into all that IBD hype, but how could I not use the same reasoning to convince myself to short into that ridiculous gap up to $21. What happened to it being a conservative stock—wouldn’t that put the odds of success of shorting into a $3 move in 2 days on a fluff event in my favor? YES. Time to grow up, probly would’ve only profited $1-$1.50, but those gains are predictable—they need to be taken!
TIM Lesson: Don’t sweat the small stuff, focus on true breakouts/breakdowns, cut losses quickly on fakeouts, don’t be afraid to re-enter again and again, if you wait for these all-important breaks, you’ll be supported by the self-fulfilling prophecy that is technical analysis, used by thousands of traders, aka the odds are on your side.
TIM Lesson: When your account is small, focus on lower priced stocks, it’s much easier to predict a 50 cent/share move on $3 stock than it is a $3/share move on a $20 stock!
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| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| July 23 | MKTY | $4.73 | $5.40 | $187 |
| July 22 | MKTY | $4.10 | $4.28 | $240 |
| July 21 | ZYXI | $3.03 | $3.18 | $130 |
| July 15 | MNLU | $6.37 | $6.73 | $340 |
| July 11 | IDAE | $2.27 | $2.49 | $630 |
| July 8 | ERII | $11.29 | $11.00 | $162 |
| July 3 | TGC | $2.14 | $2.39 | $471 |
| July 2 | HYGS | $2.15 | $2.29 | $260 |
| July 2 | TGC | $3.44 | $3.49 | $80 |
Total: $22,457 (
81%)
1aspena
February 20th, 2008 at 9:23 pm
tim,
who do u trade with? whats the best broker for a bunch of day trades
2mike
February 20th, 2008 at 10:20 pm
He uses Think or Swim
there is no best broker; well it depends.
personally i like Interactive broker for their low commissions, and the ability to trade various financial instruments, like soybeans, hong kong index futures, gold, dow futures, stocks, options, single stock options, etc.
i like TOS for their platform.
i like Tradeking for option tools
i like scottrade because it’s newbie friendly.
3mike
February 20th, 2008 at 10:25 pm
I rather painfully hold a short position in COIN and have the market move against me than to buy it.
this stock is too heavily manipulated.
4eric
February 20th, 2008 at 10:50 pm
Tim…u are doing an absolutely phenomenal job on your website! Its scary thinking you are just getting started!!!! Keep up the great work!
5Raman
February 20th, 2008 at 10:53 pm
wassup tim, do you think these stocks will continue breakouts if the Dow or Nasdaq start falling again? Also, do you rely strictly on charts, or do you monitor the mood of the market in deciding how to play a stock? i just dont think these stocks would have broke out for big gains unless the market had reversed course the way it did today, so i was wondering if you take overall market sentiment into account when deciding how to play a trade. thanks, keep up the good work!
6timsykes
February 20th, 2008 at 11:18 pm
these stocks move in some degree with the market, but as evidenced by several spikes during “the January creash”, they don’t always move in step. the market definitely helped APWR, COIN is another animal entirely. follow the stocks, not the market
7Tony Ellis
February 20th, 2008 at 11:26 pm
Mike…I’m long COIN. Why do you think it’s too heavily manipulated? MOS and POT are at all time highs and COIN is trading in tandem. Just a little more juice in it!
8Brian D
February 20th, 2008 at 11:31 pm
I’m going balls to the wall with IDMI, tightened my stop hopefully it breaks down in the morning/while I’m in class if not then i tightened the stop for a reason. Hopefully when I can get to my PC at around one it will tank but who knows it’s risky but I’ve raped this stock the past few weeks so it’s deserving. I have yet to purchase your DVD or book but the first thing would be the book when i get time away from school. I’ve learned masses from frequenting this website and can honestly say some of your plays have made me good amounts of money, few of which I actually follow I like taking my own strategy to town.
9cynic
February 20th, 2008 at 11:47 pm
http://www.timothysykes.com/fo.....c.php?id=9
get pumped for when this thing rolls over again . . . . . . .. .
10James Y.
February 21st, 2008 at 7:30 am
Hey guys, Newbe here.
How are yall determining how and where to place your stops. What kind of wiggle room do you like to give yourselves and what helps you determine what that is?
Love the sight Tim! I am here to Learn Learn Learn!
11Alvari40
February 21st, 2008 at 9:34 am
In full position short on CEC (26.69 entry).
12jcc
February 21st, 2008 at 9:38 am
Siitting short on CEC (27.14 entry) from end of the day yesterday
13Stan
February 21st, 2008 at 9:56 am
i did the same except i was not so quick.. 26.27 ouch. should have just did a market order instead of fiddling with limit orders…
14Stan
February 21st, 2008 at 9:57 am
shouldn’t this be going down a lot further? maybe long term.. 1 or 2 days?
15Alvari40
February 21st, 2008 at 10:08 am
taking 1/2 off cec and moving stop to break even.
16Alvari40
February 21st, 2008 at 10:12 am
Out of APWR short for small gain. Out of CEC as well for nice gain. Gonna sit back and see what market does since my system is to use market direction (momentum) with setups). Philly fed creating whipsaws.
17Whiskey Mac
February 21st, 2008 at 10:14 am
damn.. TDAmeri is telling me no more shares of COIN to short.
18Ivan Mutaftchiev
February 21st, 2008 at 10:17 am
Guys,
I tried to short IDMI at 2.70 this morning and it’s not letting me. It said “Short selling is not allowed for stocks under $5.00″ I use Scottrade. I doubt this also happens with other online brokers - Tim said yesterday he shorted IDMI at 3 something….Any advice ?
19Alvari40
February 21st, 2008 at 10:21 am
Get out of Scotttrade. I use TDAmeritrade and Tradestation - both allow me to short crappy stocks if they have the shares. I know Tim was pushing TOS as well.
20jcc
February 21st, 2008 at 10:35 am
Out of CEC at 26.40.
21Alvari40
February 21st, 2008 at 10:39 am
jcc - nice trade. I was just looking at it and it looks like it will roll over one more time. However, I have moved on as well. Now taking advantage of easy short money on fslr.
22Stan
February 21st, 2008 at 11:01 am
CEC - great drop off after 10:30 today…
opinions on if this can go way down tomorrow morning like it did today?
23lmsmith
February 21st, 2008 at 11:25 am
Coin is taking off!! anyone one board? I like COINW better-
24ETQT
February 21st, 2008 at 11:27 am
I’m in COIN long @ 12.15
25Tony Ellis
February 21st, 2008 at 11:57 am
COIN….I sold @12 near the open. Way too early! Nice profit though
26timsykes
February 21st, 2008 at 12:16 pm
you know you’re a trading addict when you’re
a. typing this in between meetings
b. u just shorted COIN at $12.51 even though u now u have another meeting in 10 min.
c. u just covered COIN at $12.39 cuz u have to go to your next meeting!
27timsykes
February 21st, 2008 at 1:05 pm
done with that–bloomberg baby, bloomberg–whats in play, help a guy in a cab out, i see SOLF breaking down, IDMI spking a bit, COIN looking wobbly…doesnt look like aything worthy is really out there
28be-the-ball
February 21st, 2008 at 1:17 pm
tim,
*ASYT 3 days up big, should we look to short on weakness?
29timsykes
February 21st, 2008 at 1:34 pm
syt is involved in buyout speculation, forget shorting that crap, no edge, also not up that much!
30KS
February 21st, 2008 at 1:37 pm
TIm- Love how you trade in between meetings. I laugh everytime I see you post that then cover for small gains in a few minutes cause you know you shouldn’t be trading but can’t stay away. That’s what this does to us all in some way. Just when you think you are out, they pull you back in…
31be-the-ball
February 21st, 2008 at 1:37 pm
Not taking a position in *ASYT but it is up 60% in 3 days.
coin is up 5% and you short it randomly at 12.51. draw me a line where 12.51 is a breakdown and I will eat the DVD I bought from you.
32be-the-ball
February 21st, 2008 at 1:39 pm
nevermind, was looking at the wrong chart, 12.50 is a decent spot to take a short in COIN, but shorting resistance is not in the TIM method…
33timsykes
February 21st, 2008 at 2:02 pm
COIN was a quick trade between meetings. intraday meetings screw everything up. an ideal short obviously woulda been at $12.60, when it broke a little intraday support. again, just a little trade. coin isn’t really a short until it goes negative and even then, its a breakout on a multi-day basis so u should be long biased ont he stock, especially if it can break $14. volume is weak though, lots of sellers everywhere
34cynic
February 21st, 2008 at 2:24 pm
http://www.timothysykes.com/fo.....pid=66#p66
35be-the-ball
February 21st, 2008 at 2:59 pm
tim,
ok, I am an addict also, shorted some *ASYT on the little breakdown at 3.95
36jcc
February 21st, 2008 at 3:06 pm
Watching NYNY for a possible overnight short, depending on the last hour.
Over the past 5 or 6 trading sessions, its spiked higher going into the close only to give up the spike and then some in early morning trading.
37Td
February 21st, 2008 at 3:25 pm
hey Tim what is the deal with the SOLAR sector? seems oversold and at near bottoms if there were to be a breakout to the upside-BUT is that sector crap? and breaking down even further? Elite Tradder has a good article but now i am stock long AKNS CSUN & YGE and sweating-no margin call but im shaky throw me a life ring buddy thanks -spud
38be-the-ball
February 21st, 2008 at 3:30 pm
will short more *ASYT if it can crack 3.70 here…
39Alvari40
February 21st, 2008 at 3:53 pm
Had a great day with CEC and AKS shorts. Took a bit-o-heat with my IDMI short. Overall, up 4 Benjies. Re-initiating my CEC short for an overnight hold.
40timsykes
February 21st, 2008 at 3:53 pm
solars had their chance to runup, now the dip buyers are all in, i’d be leaning towards shorting them, not that i am yet…asyt very well could go down, but pattern sn’t strong enough for me to short yet
41be-the-ball
February 21st, 2008 at 10:35 pm
covered my *ASYT short for a small gain, can’t risk holding overnight…