Remember successful PennyStocker Adam N. and this awesome post?
Well, he’s back with another great post about he’s just made over $3,000 on piece of crap carcass of a company SRZ, and instead of just playing it from the short side, he went long…something I’ve never been able to do very well.
So, let’s all learn from Adam:
I recently banked over $3000 playing SRZ from the long side and then
from the short side. Here’s a quick account on how I was able to pull
this off.
On Friday (12/05/08) SRZ opened up nearly 30% above its
closing price on a positive PR. I was alerted to this stock from Muddy
over at Investors Live chat room, which always has a ton of great
momentum plays. I didn’t jump in right away because stocks that gap up
at open often come screaming back down. But, later that morning the
stock began to climb again and with volume, and broke out to new highs
on the day, which is when I pulled the trigger to go long right around
$1 (even dollar marks make great entry/exit points). The stock held at
$1 all day so I decided to hold it over the weekend (always risky though
when playing w/ a small account) and sure enough it gapped up that
Monday morning where I covered around $1.30. The stock then continued
to climb later that day so I jumped back in long at $1.32 and covered
later that day at $1.50 (just taking gains as they came). In all, I
took a $2200 profit playing SRZ on the long side.
The next day, SRZ continued its climb all the way up to $2.64, at this
point I was done playing it long knowing full well it was waaaay over
bought and could drop back down to earth any minute, so I eagerly waited
for it to back off its high on the day. When the stock jumped to $2
early in the morning I jumped in short thinking that $2 was a natural
resistance point, but soon learned I was dead wrong as the stock began
its ascent up to its high at $2.64. Thankfully I took my losses quickly
at around $2.18 for a $400 loss (should have gotten out much sooner than
this, but I was stubborn, lesson learned). I could have saved myself
this loss if I had just waited for the first red day. Forgetting how
important it is to wait for red cost me some of my prior profits.
Then came Wednesday (12/10/2008), redemption day for me. SRZ gapped up
quickly at the open, but then came screaming back down and was red on
the day (also a muddy alert). Without hesitation this time around I
jumped in short around $2.06 (probably better to have waited to under
$2, but the stock was dropping fast). I later covered half my position
at $1.75, taking $730 in profit off the table, and let the rest ride
overnight as the stock exhibited a nice breakdown from having nearly
quadrupled from its run-up. The following day SRZ had a morning tank, a
small spike up, and then a nice all day fade where I covered when it
bottomed around $1.51 for another $710 in profits.
All in all, I banked $3240 playing both long and short on this mini supernova (a pattern detailed in my PennyStocking DVD.)
Tags: Good Trades, Guest Posts
