On October 15th I sent the following to TIMalert subscribers:
Bought 1500 Vermillion, Inc. (VRMLQ) at $16.79…trust me, this is the last thing I want to be doing right now, I’m in Vegas trying to finish the instruction manual for my seminar this weekend, trying to visit Blogworld, trying to see a bit of Vegas, not to mention this is a Pink Sheet company (meaning fast executions aren’t easy), its got a Q on the ticker meaning its bankrupt (and if they reorganize, there’s a chance all current stock holders get wiped out entirely) but this stock just keeps uptrending gradually right near its breakout highs of $17.05 and more importantly, it’s got one heck of a story/setup.
Basically they were a sad bankrupt medical company until they got FDA approval for their Ovarian Cancer test just over a month ago and the stock has shot up from 5 cents/share to $17…sounds excessive, right? Well if you do any digging, you’d see that this test could be a multi-hundred million or billion dollar product, especially considering international and related product sales…they have a bigtime partner in $10 billion Quest Diagnostics (DGX) who is also a debtholder and just converted some in the $9 range and from who VRMLQ will earn royalties, anywhere from 5-25%, but nobody’s sure…there’s already competing tests on the market, but they’re not very accurate so this test is pretty much a gimme. With a $110ish million marketcap right now, whether VRMLQ gets 5% or 25% of a $200 million-$1 billion product, it looks pretty cheap ($10 to $50 million or $50 million to $250 million in royalty payments, I know its all over the place but hard research is tough to come by, i just know that the potential is huge for such a small marketcap company)
The only thing holding this back are 2 hedge funds that own a lot of debt and can basically make this company reorganize..but if the stock is over $20, it looks like those hedge funds will just convert into stock, making bankruptcy out of the question…it’s all very complicated and obviously risky and I don’t understand it all, but given the FDA approval, the big name partner that just gave VRMLQ a vote of confidence in the $9 range, the recent gradual price action, its ability to hold near its highs and most importantly the fact that this has broken out strongly several time, $2, 3 even $4/share in a day means the upside is great and if I’m right about $20 being a key number for debtholders, then if it does get one its famous multi-dollar spikes, my goal is to sell at $21+ in the next few days…very speculative, but the risk/reward seems pretty good here…rest assured if it doesnt breakout past $17, i will close my position and cut losses/gains quickly so as not to risk a big loss…potential upside of $5+, potential loss of $1, I’ll take it any day.
PS Their old chief scientist just rejoined the firm and as of Sept 30, there were 182,000 shares short (who presumably get squeezed every time this thing breakout, explaining its ability to jump $3-$4/day)
Even though in just the last month the stock was up from 5 cents/share, I was doing EXACTLY what my instructional trading DVD packages teach others to do: BUY BREAKOUTS IN THE MOST VOLATILE STOCKS WHEN THE SETUP WARRANTS IT.
Lots of people spend their entire lives searching for “the next multi-bagger” and they rarely get it…given the high percentage setup once VRMLQ cracked above $17, it was PREDICTABLE that it would jump 10, 20 or even 30% over the next few days.
Look at how the chart developed after I bought at $16.79 you suckers:
I didn’t even time it right, exiting after 2 days at $18.65, because I’m just a lowly newsletter writer whose made millions by imperfectly trading these setups….and they are so good that perfection isn’t required
This “unlikely” (to some) breakout reminded me of an oldie but goodie when one of my DVD students banked $6,000+ buying the “unlikely” (to some) breakout in the over-extended Pyramid Oil Company (PDO) nearly 1.5 years ago (yup, the patterns in my instructional DVDs aren’t temporary, they last and they are there for the taking)
This time, dozens of TIMalert subscribers profited as the stock did in fact go to my “unlikely” (to some) price target of $22 (it wasn’t a random target, my Vegas seminar people know EXACTLY why I chose that and you will too if you get the awesome 15-hour and 160 page instruction manual DVD package which is coming soon…contact me if you’re interested)
TIMalert subscriber and my trading profits on VRMLQ exceeded $13,000 and really only 1-2 of us even had enough patience to hold til my target (if we had, profits coulda woulda shoulda been $30,000+):
Sold 500 vrmlq at 19.20. $2750 profit.Keeping 300.
-ZeccoTrader
I’m a gardener, raking in the cabbage!! +$2346 on VRMLQ out at $21.00… Probably too soon, but oh well. Thanks!!!!
-Torey
+$480 on VRMLQ.
-Chris
Exited $VRMLQ for $180 in profits:
-GE
$395 profit on VRMLQ and some nail biting, thanks.
-jian
Damn. Got out right before tthe big spike to 8.30 I’ll take the +$250. Thanks Tim!
-zman
Pinksheet stocks are so hard to fill. Took me ages to fill 1K shares VRMLQ @16.965. Wow, already up $700.
-Bill
out at $18.25. Quick $310 profit.
-alex F.
I love short squeezes! Just sold my VRMLQ @ 19.01 for a profit of $330. Thanks tim, this one was all you.
-Marc
Bought 500 shares of VRMLQ this morning at 18.05 and got out at 19.10 +$500
-zmann
Scalped +$236.53 out of VRMLQ, holding 500 shares from $16.9911…+$305.97 on my other 500 shares couldn’t resist profits.
-Reaper
First profit since joining TimTrades: Bought VRMLQ @ $17.17 and sold at $19.16 for a 12% profit in 1 day.
-K.
First profit with TIMalerts – +$34.50 after commissions, VRMLQ
-Andrew
+$47 on VRMLQ
-Nltamas
Tags: How To Buy Stocks, How To Trade Stocks, Momentum Trading, Technical Breakouts, Vermillion Inc.
