Shady Is As Microcap Does, Say It With Me Now, It’s All In The Chart

Posted by Timothy Sykes on Wed 16th of Jan, 2008 02:28:50 PM

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Like 99.9% of the civilized world, this guy just doesn’t understand microcap momentum—he tries to uncover how shady the company is. FYI buddy, every microcap is shady, start likin’ it! See my comment at the end of his “article”.

Doesn’t really affect me one way or the other, but this market is pathetic! Trying to bounce today, only to fail, what a waste of dip buyers! Today there were lots of scalp plays, but nothing more—no perfect COIN, AKNS, JMBA-type charts. The one chart that’s most interesting, VRUS, 9which I posted last night) continues to surge, up $5 today, god bless those of you who have the guts to be long—you’re the reason why my strategies are gonna make somebody else a millionaire. Those who played SCON for a gap up and presumably lost; don’t blame the poor market open, blame yourselves, that wasn’t a great pattern to buy into and you should know better.

Even though COIN was strong this morning, I wanted to short it into strength because the volume was pathetic and I thought there’d be an easy $1 pullback after the morning spike. It ran smack into a wall of sellers in the $13ish range, so I tried shorting, oops, no shares available for COIN, COINZ and COINW. That’s why you really have to be early (think yesterday) and be willing to risk squeezes to get shares of these hard to borrows because when the chart is easy to predict, all the shorts will have been borrowed. Oh well, hopefully this thing can really squeeze those “long term shorts”, freeing up some shares for me at higher prices (or it’ll just fade slowly away)!

Buying the morning panic is not easy, but since I’m addicted to trading and want to teach you guys all sorts of strategies, I thought I’d give it a shot. I’ve had some success with this pattern, the key is to keep telling yourself you don’t want to trade, you don’t want to trade, you don’t want to trade…but if the price sinks low enough, you can’t help but enter. This is how I played Mosaic (NYSE: MOS) this morning, great company, recently reported blowout numbers (I said they were my favorite stock to buy on weakness in my latest AOL article) and after tanking yesterday, the stock, along with other agri favorite Monsanto (NYSE: MON), was getting wrecked this morning, down nearly $11, when I picked up 60 shares at $89.62. That put it off $20 from its Monday strong earnings breakout and even though true support wasn’t until $80 (pre-earnings), I figured it could/should bounce $3-4/share.

But here’s where I went wrong. Look at the intraday chart, I was right to buy into the panic, buuuuut I should’ve waited for some signs of bottoming first, namely the few minutes of sideways price action that occurred just after I bought around $88. But for fear of missing the bottom, I jumped right in and I was down nearly immediately $2/share. I was a little worried, but this is a solid company and my position size was acceptable, and even though I knew I had a ton of chores to do today before going to Utah tomorrow (for Sundance!), I was determined to hold as long as necessary (1 hour is long-term).

The good news is I didn’t have to wait long, 10 minutes later, I was up $1/share at $90.50. But with the stock struggling to truly bounce, the overall market still heading, lower, albeit slightly, and all those chores piling up in my head, I decided to get out, selling my 60 shares at $90.04, a $20 gain after commissions—pathetic. I was off by $2 on picking the low and the high (as the stock went to $92+ within 10 more minutes, $94 most of the day), just more proof I’m a bad timer and that you can do better. A fairly predictable $4-6 price swing within 30 minutes is worth a trade, even if you can only profit from $1, 2, or $3/share of it (or 40 cents/share for idiots like me!).

As it turns out, any of the semiconductor stocks like SIGM, NVDA BRCM would’ve been better bounce plays, but with the SMH breaking 4-year support, that’s a dangerous industry to buy into. Not to mention bouncing solar plays SOLF, CSIQ, the whole bunch, but with falling knife charts like those, I stayed far away.

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See Tim's full bio HERE. Tim turned a few thousand dollars into a few million by taking small gains time after time on hundreds of volatile penny stocks, discovering that his trading strategy, while consistently successful, works best for those with smaller accounts.

Determined to teach others this PennyStocking trading strategy (learn more HERE), he went back to his original $12,415 roots (already $27,000 even though the stock market is down 20%!) to show everyone how to turn thousands into millions, even while having a life (somewhat) and making plenty of mistakes.

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Hard work to learn how the greatly misunderstood niche of penny stocks provides opportunities every now and then on which you should pounce.

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Long story short, wait for stocks that are extremely volatile - for whatever reason - and then aim to take small profits (between 10 and 50% within a few hours, days or weeks) here and there, either from betting on higher or lower prices (yes, you can make $ betting on lower prices, it's called Shortstocking (learn more HERE).

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As Tim explains in several ALL-NEW instructional DVDs (see them HERE) and in over 900+ blog posts, penny stocks are the most hyped and corrupt niche in the entire investment world. These two qualities make them the easiest to profit from (legally) because the vast majority of people who play penny stocks are suckers and all-around ignorant people. If you have any intelligence whatsoever, you have a clear advantage and it's like playing basketball against mental midgets.

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