That’s right, instead of following all the incapable-of-thinking-outside-the-box-lemming-like traders, I went against the grain today and did what I did best: short sell a low priced stock whose upward momentum looks to be reversing after a huuuuge run not due to fundamental news, but due to hype.
Trust me, I was more than just a little tempted to go along with the simplistic market bottoming theory and buy FAS, BAC, MS, C or AXP, but I held onto my beliefs that maybe, just maybe this rally is nothing more than a self-fulfilling prophecy by a bunch of traders who want a market bottom and that it might not last into tomorrow…after all, the peeps on StockTwits were going crazy with those kind of plays…
So I sent this alert to TIMalert subscribers:
Shorted 1300 RGR at $10.25, play on market strength…this gun play has been on my watchlist for several days, just went red on the day because it works inversely to the market’s strength (hence it breaking out to new highs when the market was tanking)…there’s technical support in the $10.15 area and a lot of support at $9.80, but if the overall market keeps surging, I don’t think those minor supports really matter, my goal is to cover around $9.80, gotta see how it acts if and when its gets there as to whether it’ll really crack big, also cut losses quick if it starts surging
Look at that afternoon drop–noting that there was a triple top in the $10.60-$10.80 area and that $10.10-$10.15 was support (now becomes resistance as its cracked):
I also posted on the TIMalerts.com subscribers-only website that fellow gunmaker SWHC might be a good play too and PennyStocking combo package DVD student T.B. rocked that play, shorting not once but twice and profiting by $800 (which is more than he paid for the DVDs that taught him the very pattern from which he profited!)
Actually, as you can see from the charts below, SWHC was a far better short and I coulda woulda shorted that one instead of or in addition to RGR, but when I shorted RGR, SWHC hadn’t gone red yet on the day…
…ah well, can’t be perfect, I finished the day up $200 or so and several other TIMalert subscribers also made a few hundred each, all adding up to a few thousand dollars so far.
Tomorrow the goal is the same as every time I short a stock that’s up too much and has now gone red–morning panic, ideally breaking below that $9.75-$9.80 congestion zone so I can cover in the $9.25-$9.50 area. C’mon morning panic, gotta love stop losses getting taken out!
Normally I’m somewhat scared when I hold a short overnight in a seriously surging market, but considering RGR failed to even finish positive on the day with the market up 6-7%, well, that’s just pathetic! Every single momentum trader with any intelligence whatsoever was selling today–maybe even shorting too–and today’s price action leads me, and anyone with a basic understanding of technical analysis, to believe RGR will be weak tomorrow and probly the next day too because its momentum is gone…and now there are tons of better stocks out there whose momentum is just warming up….trends change, profit from it!
Tags: Breakdowns, Good Trades, Testimonials
