First time around shorting sketchy-100-year-old-oil-company-that’s-watched-the-world-go-by PDO, I barely made anything before it spiked hardcore and proved itself to be a full fledged Supernova, squeezing those stubborn short sellers who didn’t purchase my instructional DVD PennyStocking (or else they’d have cut their losses quickly) and putting the stock on my back burner as a potential short. So why today—when I knew I’d be hopping all over the place on planes, trains and automobiles during market hours—would I look to trade this sucker?
Simple: cuz I’ve got years of experience trading while traveling and considering this is the 3rd day short-squeeze-induced runup inside of a larger 8-day commodity-related runup, the odds favored an intraday breakdown of some kind—large or small would be determined by stop losses, fear, commodity prices and volume.
Mind you I was also watching fellow 8-day speculative AMEX oil runner MXC for a possible short—reserving 500 shares in addition to 500 PDO, just in case the variables aligned—but watching the two from the airport lounge, PDO looked much weaker with big sell blocks reigning down on sturdy buy blocks while MXC had much less volume, hardly any sellers so it didn’t look good to short at all.
Considering my flight was in less than 1.5 hours, I didn’t look forward to executing a 500 share short PDO at $8.48, but the sell blocks impressively took out 14k of the 15k buy order at $8.48 so I got in with some big $ and my little order took out the remainder of the buy order so immediately the price was $8.45 x $8.50. Understand this position was less than 20% of my assets, or a half trading position, because if you look at PDO’s multi-year chart, you see it once spiked past $10 (albeit briefly) so I’d have no problem doubling up if it went higher.
The small float (1.3mil) and potentially big news (doesn’t even matter, all the news out of these companies is “potentially big”) scare many potential shorts away–I think those variables are just like scarecrows that are much less important than the above-listed variables.
But I didn’t need to worry about that—within 30 minutes the sell orders just kept streaming in, the breakdown was definitely on—even as commodity prices and MXC held firm—so I wanted to cover under $8 but with my traveling schedule and big buy blocks everywhere up until $8.15, I decided to play it safe and cover into the ask at $8.18, a 30 cent/share gain in 35 minutes, $135 profit after commissions, now 7%+ on the month, 50% even in 6 months. Jewwwwwwwwww yahhhhhhhhh!
I hope all these crappy commodity plays keep going—this one, FPP, KOG and MXC—maybe GENC-like, might be tough though—great risk-reward shorting opportunities all along the way—but only when the variables are perfectly aligned like this. Maybe I will celebrate with that beer pong table!
Posted in Cool Products, Decent Trades, DVD, Patterns To Short, Short Selling, Short Squeezes, Supernovas