TIM $14,933, Up $1,583, Thank You IDMI, Thank You PennyStocking
Short selling 40% of my TIM assets into the face of pure insanity, aka (IDMI) up 234% on 3 month old news and a PR that failed to get much interest when it was released the day before, might seem a little crazy to some. But then again they haven’t traded THIS EXACT SAME PATTERN HUNDREDS OF TIMES LIKE I HAVE.
Over the past decade, even though the plays, the players, the message boards, the news, the industries, the % of assets I’ve used, the extent of my poor timing on my entries and exits, the patterns and the % profits have remained more or less the same. And that’s why I think I can teach this game to anybody.
TIM Lesson: It’s not about BS random picks, it’s about pattern recognition and understanding of the variables to adapt to the patterns mutations (Don’t worry haters, I won’t bring up my DVD) (oops!)
You see, as usual, I made plenty of mistakes—missing the buying opportunity on the breakout at $2, shorting too early (at $3.15), averaging up (at $3.75 to get my total average cost to $3.36), not adding to my position this morning pre-market when proven correct (Thinkorswim had plenty of shares available to short in the $3.30 range—in hindsight I should’ve added, but who knew if it would spike at the open) and covering too early (at an average of $2.90ish—right now at $2.70—and will probably go lower over the next few days) and for all my mistakes, I came away with a 40+ cent/share profit, $650ish, 12% in overnight, one of TIM’s largest to date.
Is this just the latest example of how lucky I am? Am I Fooled By Randomness? Possibly. Quite possibly. But somehow I don’t believe that it’s “random” for a stock that surged—basically due to penny stock momentum and a short squeeze—to be one of the biggest losers in the stock market the next day. Sure, sure they got that Nasdaq delisting notice, blah blah, but that really only applies to stocks under $1 so that’s not a big concern here and I doubt it influenced things much. So just take a look at these pumped up penny stock charts and see all these similar patterns. I’m not a “stock picking genius”, I didn’t “discover” these patterns (I didn’t land on Plymouth Rock, Plymouth Rock landed on me!) and there’s plenty of other people who play these at TheLion and GreenOnTheScreen, (but I’m gonna help them go mainstream (and for that, I’m taking my cut!)), You’ll notice some of these patterns aren’t similar and if you’ve read my book, you know it’s these “imperfect patterns” that have always done me in.
So I’m gonna keep playing and talking/writing up a storm about patterns like (IDMI)—ideally, focusing purely on them because they off the best risk-reward trades in the ENTIRE stock market. Sure, they’re scary, so it’s just gonna take practice and knowledge to get you guys comfortable playing them. Maybe I’ll get better at buying the initial breakouts, waiting long enough, and shorting the breakdowns, but I wouldn’t count on it. I’ve simply got too many other things to do right now, namely, writing, blogging, vlogging, podcasting and cutting through all the BS in finance. It’s a full-time job. Trading these patterns will always be up there, but remember, they’re not very scalable (no way to short more 1 million shares of IDMI, so $3mil is the max on this one, so apologies to the rich bastards out there who are only interested in scalable strategies, this isn’t for you), aka ideal for individual investors and traders.
So take a look at this annotated chart and learn. Depending on price action, I might re-short (IDMI), c’mon bounce you POS!
UPDATE: Couldn’t help myself, re-shorted 800 shares of IDMI on the bounce at $3.18, covered within 10 minutes at $2.95, easy, easy $150ish. Newbies: I don’t advise shorting late morning spikes, they can go further than you expect and sometimes even turn a stock completely around (rare)…this is a true POS company though, so I would have no problem adding on the way up–that’s right Livermore zealots, I average up!
Posted in 101good, Good Trades, Patterns To Short, Short Selling, TIM Lessons