Update: I made roughly $3,000 on this trade and thanks to my traveling, I played it far too conservatively as the stock dropped all the way from $36 to $26 in just a few days after my short…I covered at $34…luckily some subscribers to my 4 newsletters fared much better, see all the details of how we closed out this trade.
PennyStocking Silver subscribers and TIMalert subscribers know I am short an infomercial company whose stock has surged 100%+ in the past few days after some truly puffed up press releases and news pieces, but what nobody knows is that I will be flying from roughly 9:30AM EST to 12 noon EST today so I am “flying blind” with my roughly $54,000 short position which I don’t recommend any of you ever do unless your a writer of 4 newsletters who uses his trading as a teaching tool like I do.
But heres my reasoning and why I like my odds with this position:
1. First down day was yesterday, as those who have watched my 10 instructional DVD packages know, this is my brea and butter short pattern on pumped up pieces of trash
2. Volume has started to fade bigtime, another great sign.
3. Yesterday it had a 10%+ morning panic, from which it barely rebounded…another verrrrry positive sign for shorting
4. Infomercial companies ALWAYS come crashing down–deceptive marketing practice boost profits for the short term, but they ALWAYS bite companies later on.
5. This company just recently received an F rating from the BBB…do a google search (if you subscribed to one of my 4 newsletters, you’d know what company name to search!) followed by the words “scam” and “fraud” and see what comes up.
6. All afternoon the stock could’ve bounced–despite several fakeouts, the sellers were persistent, a possible start of a new trend.
7. The CEO has made big claims and gotten nationwide press before…his claims did not pan out.
8. The fine CEO sued a popular blogger, but lost the case and was forced to pay their legal bills…reading the blog post about it is pretty funny.
9. This is $400+ million company whose own valuation puts them at just over half that…LOL
10. the company wants to issue press releases talking about how they’re now profitable…very questionable considering their losses of approximately $25 million, $49 million and $13 million in 2009, 2008 and 2007 respectively.
I remain short for the time being, but only subscribers to my 4 newsletters know what the heck I’m even talking about!
Posted in Manipulation, Patterns To Short