This was the alert sent to PennyStocking Silver subscribers and TIMalert subscribers:
Covered AspenBio Pharma, Inc. (APPY) at 4.20 on its failure to break 4 convincingly, it probly will eventually, but odds are it spikes, so i am playing safe
But a great trade, but I’ll use this to teach a bit
Lesson #1: The late day spike yesterday from 4.02 up to 4.30 is never a good sign of a next day morning panic, keeps shorts on edge
Lesson #2: APPY did drop back to the 4.16 area at the market open, but aside from some large sellers at 4.20, there were more big bidders on the buy side than sell side…I saw those big bidders and immediately put my limit at 4.20 to cover my entire position and not risk getting squeezed…remember these volatile biotech penny stocks act like a pendulum, if they don’t crack technical support ($4 never even had a chance today), the momentum swings the other way…gotta gotta gotta watch Level 2 and if you do’t understand Level 2, check out my Learn Level 2 DVD package
Lesson #3: The spike was to the 4.30s-4.40s…where it is right now…painful yes, but those slow to react to the bottom could still cut losses for 10-20 cents/share…some morning spikes are not that kind, I’ve found it good to cut trades quickly, whether I have a loss or gain, when the stock doesn’t act the way I expect (remember my ROHI trade the other day, I took quick profits even though it ended up meaning that I played it too safe as the stock dropped another 15% intraday)
Lesson #4: Since it is late in APPY’s runup and it did have its first down day yesterday, there was still a few minutes at the open to cover or even buy before the eventual spike…despite this stock not breaking down the way I wanted, I’d make this trade over and over as the afternoon fade after sideways price action on the first down day of a questionable stock is a highly reliable pattern….doesn’t win every time as evidenced by this, but the goal of trading is not to win every time, it’s to partake in highly reliable setups like this and then let the odds do their thing while managing risk along the way.