I didn’t expect any trades today, but when COIN appeared in Barrons recommended by some “guru”, PennyStocking was on (crap company + fluff news + predictable chart pattern = my kind of play)!
If you’ve read this blog over the past few weeks, you know this stock and I don’t get along at all—I’ve had nothing but losses (which I cut quickly) trying to pick its ultimate top. I think it’s a horrible company, but the pumpers are deep and knowledgeable and when they managed to break the stock above a multi-week base between $9 and $12, no matter the hardcore research and anticipation of a double-top at $14, smart were the traders who switched off their emotions and adopted a long bias.
When I saw the news this morning followed by a quick run up to the high $13s, I posted about it on a new thread in the FORUMS dedicated to short squeezes. But, like oft-breaking out sketchy company YTEC, I wanted to make sure this stock broke out before buying. As foretold to me by several failed breakout attempts over the past few days—2 failed big time breakouts today alone—I wanted the stock to break $14.50 before buying, preferably into the market close to scare those determined shorts overnight and create a morning spike tomorrow.
Unfortunately, I had an hourlong radio interview on Voice America Business Radio
scheduled from 3-4PM—prime time for a potential COIN run into the close. I was comforted by the stock’s failed breakout attempt from 2-3PM, so while I kept my trading software open just in case, I expected to focus solely on the radio interview.
The interview was going particularly well when around 3:40pm COIN started acting up around $14.40, so at first, I tried to ignore it, but the buying volume was strong, so as I talked, I bought 300 shares at $14.49. It was a perfect breakout over multiple time frames: intraday, weekly and all-time, the perfect self-fulfilling prophecy destined to take it even higher. I even stopped the interview to detail all this because it exemplified the kind of patterns I look to trade.
Listen to whole interview here!
[audio:http://www.timothysykes.com/wp-content/themes/TimothySykes/audio/goodman030308.mp3]
Going into the market close, my thesis proved correct as the buying volume remained strong, short sellers were panicking and the stock closed higher at $14.74. Definitely click that link above and listen so you can understand my strategies better.
UPDATE: I wanted to hold this position overnight, but I got a call about an important morning meeting tomorrow so I sold after-hours at $14.97, for a solid $140ish profit. Too bad, I wouldn’t be surprised to see the stock surge to $15.50 or maybe even $16 tomorrow morning, but unless the volume can really remain strong—think 5 million +—it’s gonna be tough to hold those kinds of gains. Whatever the case, I def. wouldn’t short this anytime soon.
Posted in Breakouts, Interviews, Patterns To Buy, Podcasts, Press