So much for Thinkorswim disallowing the shorting of OTCBB stocks as I reserved 2,000 shares of ZYXI to short early this morning (latecomers got no shares as TIMalert subscribers grabbed the all borrowable shares…
Given that its chart was eerily similar to similarly crappy company UBHI, which dropped nicely off its highs, I tried shorting into the morning panic around $3.30, but discovered my Thinkorswim rep had mistakenly inputted 200 shares instead of 2,000 shares into my account so I had to login to their handy chat program and fix that mistake. Unfortunately, morning panics are quick so by the time we got that straightened out, the stock had tanked all the way to the $2.90 area…bastards…but manual ‘fat finger’ mistakes do happen, you just gotta accept it…
Luckily, there’s been a decent bounce so far, so as I alerts TIMalert peeps, I shorted 1,000 shares at $3.18, the goal being to cover in the $2.75 area, either later today (wishful thinking) or into a morning drop tomorrow–or even Wednesday or Thursday–considering this is a half position (I purposely used only 1,000 out of 2,000 cuz shorting late morning into a rebound is not an ideal chart pattern for me).
So what’s the situation now? Well, I researched it thoroughly last night (as I do all the companies on my morning watchlists) so I know that while they’ve been having typically sugarcoated press releases talking about growing revenue/profits, their monthly updates in April, May and June were met with no buying power…only after this early July PR that they’re changing their corporate name in the hopes of going AMEX has their stock spiked 50%+. (Listen, name changes are done only by the worst companies who are embarrassed of their past…CEO says it simplifies things my arse! Why would anyone want to go through 5000 hours of additional paperwork, there’s a definite stench of some kind here)
Normally, I’m hesitant to short fundamentally sound companies, but this is one sleepy mofo whose business/industry–pain management/electrotherapy–ain’t goin’ anywhere fast, so methinks this spike retraces below $3–just as it did this morning–support being at $2.85ish and $2.60ish…volume has already begun to fade, so if this closes down on the day, it’s the first down day pattern we all know and love…for reference, see the chart below of how similar spiker Hydrogenics Corporation (USA) (HYGS) performed after it had the same kind of morning panic and slight rebound throughout the day (usually a momentum killer, signs that a gradual fade will play out over the next few days):
UPDATE: Just tried to break above $3.20, ran into wall, very good sign it will close red today making me a happy TIMMAYYY!
Tags: Breakdowns, Patterns To Short, Short Selling
