After The Morning Rain Comes The Afternoon Sunshine
TIM $15,828 Up $243, One Bad Trade, One Perfect Trade
Today I focused all my time and energy on the two hottest microcaps, COIN and SHZ. As I detailed in this post, I screwed up COIN royally. Typical of a morning short sale. Considering the $12.40 closing price, my $13.50 entry price turned out to be pretty good—if I coulda woulda shoulda endured a little pain first—but since I always cut my losses quickly that was never really an option. And not cutting my losses quickly was out of the question.
After the failure to hold the breakout at $14, the ideal afternoon trade became shorting right at that $13.50 level because as you can see in the intraday chart, while holding that price sparked the morning surge, the failure to hold it in the afternoon—not once but twice—sparked a further sell off. Another ideal entry would be when the stock went negative on the day at $13.
TIM Lesson: You can prepare ahead of time all the key price levels you want, but you gotta wait and see how the stock acts around them before trading.
TIM Lesson: Get this through your stupid little Jew head: don’t short in the morning, too much risk of morning spikeness, wait for the chart to become more gradual as happens in the afternoon.
Like I said last night, SHZ is a much easier PennyStocking play. Its chart is a true Supernova. Thanks to two consecutive 50% up days—up from $4 on no news—c’mon how can the odds not favor the stock retreating, at least a little? Sure, there’s the risk of a third day short squeeze, but if you wail until all the morning spikeness is done with, that risk drops dramatically.
TIM Lesson: Shorting into big fluff winners on the 3rd or 4th day is ideal, especially when they’re just down a little bit, meaning the issue (of a big move one way or the other) is still in doubt.
Now, let me just say, this is one of the most perfect stock trades I’ve ever executed. Forget about the small dollar gain–$358 is a good day’s pay you snobby Wall Street bastards—and focus on the setup, thesis and execution.
When I began looking to short at $8.44 around noon, I was thinking it could really fall of a cliff, all the way to the $6 or $7 range. But it had to crack the intraday sideways price action between $8.40 and $8.75 first or else risk an afternoon spike, as happened yesterday, and considering a big 10,000 share buy block at $8.35, and the stock’s pathetic daily volume of 150,000ish shares, that wouldn’t be easy.
So, I waited.
Around 1:30pm, a 5,000ish share block knocked out half the big buy order and there it continued to sit for a tense 20 minutes—I wanted to short but only if it took that big guy out. A big 10,000 share sell order came in at $8.59 and then several smaller orders came in underneath. I felt protected against a big spike and shorted 500 shares at $8.43.
Less than ten minutes later, some of those big sell orders rained down on that now injured big buy order at $8.35, quickly taking it out and then the stock really did fall off a cliff. It took out the few remaining buys at $8, then $7.80. 60 cent gain, nope, I was determined to hold overnight. The stock bounced to $8, but big sell orders there protected me (even though I had my hand on my mouse in case they started to get takne out). Within 10 more minutes there was another leg down, but bids in the $7.70 range were tough to get taken out, even though they only showed 100 and 200 shares. Big buyers were cloaking their big orders. Typical short sellers covering, definitely rich dudes. $7.70 got taken out with a bit of a fight and when some big sell orders couldn’t take out $7.67 I said screw it, covering my shares into an obvious market order at $7.68
It was a perfect cover. The spread between the bid and ask was its same ridiculous self and the stock bounced all the way back to $8.20, even though the bid lagged around $7.80-$7.90. After the bounce, the stock closed near its lows, but I’d made, 75 cents/share or 9%, in 40 minutes. The setup, my thesis and execution were all perfect. The perfect blossom. All perfect.
$7.60 is now 2-day support, so I’ll look to short into that tomorrow because I think it’s gonna go under $7 and maybe even $6, at least temporarily, but I’ll be extra careful because even though the stock is still up $3.50 off its lows, it’s already $2 off its highs.
And there’s another micro momo runner in Dara Biosciences (DARA), up 80% ont eh day, hopefully it can squeeze some early shorts and make it a multi-day SHZ-like play.
PS TIM, another all-time high now, up 12% on the month, I’m getting used to being poor again, so much more fun to be the underdog!
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| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Sept 4 | COIN | $5.70 | $6.21 | $745 |
| Sept 3 | COIN | $6.49 | $6.30 | $305 |
| Sept 3 | COINW | $2.75 | $2.85 | $180 |
| Sept 2 | TAYD | $7.51 | $8.13 | $545 |
| Aug 18 | FOUR | $2.80 | $2.66 | $342 |
| Aug 14 | APII | $2.66 | $3.30 | $1261 |
| Aug 12 | APII | $3.25 | $3.40 | $285 |
| Aug 7 | NOBL | $5.02 | $5.49 | $680 |
Total: $26,508 (
114%)
1Tracy Coenen
February 26th, 2008 at 5:51 pm
Timmayyyyyyyyy - You’re closing in on $16k. Nice work, kiddo.
2eric
February 26th, 2008 at 6:40 pm
Damm Tim…Ive never doubted your trading skills. You’re kicking ass!
3Dave
February 26th, 2008 at 8:21 pm
Tim,
I am holding up with you trading only stock splits. Just finished by 3rd trade in the first 46 days of starting the blog, up a total of 34% on the 10K portfolio. I am adding some cash making the next trade $17.8K.
I am going to do my best in keeping up with you for the next two years and making the 10K into 1.7M hopefully as you are doing the same thing with your trading strategy.
hope to meet you at the finish line successuful!
Dave
http://tradingsplits.blogspot.com
4sonid
February 26th, 2008 at 9:22 pm
good work on the new high man! gotta question for ya, what do you think about this whole shady thing going on with ARTC?
5Brian D
February 26th, 2008 at 10:10 pm
Nice trading, I got in at $8.53 on SHZ which i thought might not be bright at the moment but it looked like a good chart, went to work and came back up $.70 a share. That pattern day trader rule is right around the corner for me. I give it two months (month and a half?) before you’re out and in the open to trade freely.
6timsykes
February 26th, 2008 at 10:36 pm
ARTC, irrelevant/boring chart. i don n’t waste my time looking at it.
Brian, don’t set deadlines for gains, thats when u get into trouble, just take the opportunities as they come, no more, no less
7be-the-ball
February 26th, 2008 at 11:28 pm
TIm, any stocks besides DARA and SHZ that you see as top prospects for tomorrow, I ask because I haven’t found any myself?
Question, do you use TOS web platform or their desktop application?
8Brian D
February 26th, 2008 at 11:59 pm
I have issues with forcing things at times, although I have been making some really good trades and gains to get out of the under 25k category I do force a lot of things. I do have patience when holding though haha ;)
9be-the-ball
February 27th, 2008 at 12:18 am
Tim,
How about NCI on a break above 16 with volume?
10Ivan Mutaftchiev
February 27th, 2008 at 8:58 am
RE: COIN
Tim,
You said in a previous post that if COIN breaks 14 on 5 mil volume, it will go a lot higher…How did you come up with that number i.e. the 5 Mil ?
11tsa
February 27th, 2008 at 8:59 am
In pre-market I succeeded to short 300 sh of DARA at $ 4.45, buy back at $ 4.12 and $ 3.96. Like COIN yesterday, could it happen a morning spike before a great opportunity to short ? That’s why I decided to cover quickly my position with a small profit.
I found absolutely no news about DARA explaining this surge….
12timsykes
February 27th, 2008 at 9:11 am
nice short on DARA, what broker did u use to find shares–rare instance when TOS has none.
COIN–5 mil was just a round number, basically to break and hold $14, volume really needed to explode cuz there’s lots of sellers. it didn’t get that, hence my short
13tsa
February 27th, 2008 at 9:46 am
I use directly the Sterling technologies platform.
14tsa
February 27th, 2008 at 9:48 am
Sterling provides an easy to borrow list of stocks each morning.
15lmsmith
February 27th, 2008 at 9:52 am
I went 406 shares long on coin at $12.48 about 15 min ago….. I am going to ditch out any minute- this stock moves up fast in the a.m and down as quickly in the p.m
16tsa
February 27th, 2008 at 9:56 am
With DARA I start to build a short position with 100sh at $ 4.89, I will average with 2-300s more above $ 5-5.50. Today I keep my position until 3pm.
17timsykes
February 27th, 2008 at 10:00 am
careful on DARA, reember SHZ, this thing could go to 6-8 just for the fun of it.
speaking SHZ, i like this morning spike!
18manhack
February 27th, 2008 at 10:01 am
DARA seems too unpredictable to build a position short at the moment. Maybe i’m wrong
19timsykes
February 27th, 2008 at 10:06 am
short 500 SHZ at $8.40, right back to where i shorted it yesterday, before my 9% gain
20timsykes
February 27th, 2008 at 10:06 am
whoops mean 400 shares
21timsykes
February 27th, 2008 at 10:10 am
and there’s $6 for DARA. morning spikeness to its fullest!
22lmsmith
February 27th, 2008 at 10:11 am
Out of coin at $13.41- nice quick profit….. Tim I am learning a lot- Forget the holding b.s Sell the bitch….Love it :)
23Tony Ellis
February 27th, 2008 at 10:20 am
shorted COIN 13.40
24Gary
February 27th, 2008 at 10:22 am
In 500 SHZ Short 870
25Dan
February 27th, 2008 at 10:25 am
People Just buy AGIX Its up again going to 1.50 soon. Check it out
26AP
February 27th, 2008 at 10:29 am
I love the lower High SHZ made this morning.. it’s a gift.
27timsykes
February 27th, 2008 at 10:29 am
ahhhhh covered SHZ at $8.7, thats annoying, fat finger mistake, going to a meeting meant to put my cover limit at $7.75 Can u say stupid?
28tsa
February 27th, 2008 at 10:32 am
DARA it could happen a second run back up from $ 5.90. So I take my loss there (100sh only)
29Gary
February 27th, 2008 at 10:34 am
Hey Tim,
When is TimTV Comming, anything more exact then soon?
30stan
February 27th, 2008 at 10:48 am
tsa - what broker do you have where u can get short shares in pre market/after hours? TOS?
can you do this in TOS? anyone…
31stan
February 27th, 2008 at 11:01 am
SOLF was good for the last 2 weeks to short… i wonder if it has more shorting potential but maybe that is old news and it has bottomed out.. Thoughts?
32tsa
February 27th, 2008 at 12:00 pm
Stan, I am a remote trader with a prop firm. So I pay $250 each month to take profit of Sterling software. With them easy to short what you want to from 7 am til 4 pm.
I just succeed a short on DARA. So one good trade in pre-market, a loss in the second one, a good third one.
33Ivan Mutaftchiev
February 27th, 2008 at 12:36 pm
COIN
Guys,
Scottrade has plenty of shares for short selling for COIN. I’m short at 12.80….
34Ivan Mutaftchiev
February 27th, 2008 at 1:12 pm
Just added to my COIN short at 13.10…
This POS is about to freefall just like it did at this time yesterday…
35timsykes
February 27th, 2008 at 1:30 pm
they’re editing TIMtv right now, who knows how long, probly a few more weeks. also got TIMradio comin!
SOLF looks EXACTLY like PEIX, posted those charts a little while back, scary
why short COIN, yes it double topped, but its also got support around 11.50-12 and a squeeze is still likely
36timsykes
February 27th, 2008 at 1:30 pm
and COIN freefeell yesterday because it couldnt hold its breakout…today its just a random pattern
37ryan z
February 27th, 2008 at 1:48 pm
hey tim has AXT registered on your radar at all? it beat on revs and outlook today, and its volume is almost 10x its average… and the chart shows some sharp gains followed by even sharper falls after for the past 3 mos.
38ryan z
February 27th, 2008 at 1:49 pm
sorry that was AXTI
39tsa
February 27th, 2008 at 2:04 pm
Good day to short TISI after a surge of 3 days, I am doing my best trade of the day for 1 hour ;-)
40be-the-ball
February 27th, 2008 at 2:23 pm
tsa,
nice one, I was watching that TISI and forgot all about it this morning.
41Brian D
February 27th, 2008 at 2:26 pm
Went long DARA at $3.95 got out at $5.75 because I couldn’t access a PC sooner, risky play, but tthen I shorted the whore and am still holding fuckin beautious day on this one
42John
February 27th, 2008 at 2:28 pm
TISI was good one, but how did you locate it first time? Is there a way we can find out our next pick in advance?
43tsa
February 27th, 2008 at 2:32 pm
My first short on TISI was at $ 31.20 cover at $ 30.80, reshort at $ 31.40, buy back at $ 31.12, now it is too late to do something
44Marc
February 27th, 2008 at 2:32 pm
Any opinion on shorting ZLC? CPI is high, inflation fear, valentines is gone, Christmas is not here, no one is going to buy jewellery at this time of the year, what do you think?
45tsa
February 27th, 2008 at 2:34 pm
sorry please read reshort at $ 30.40, buy back at $ 30.12
46tsa
February 27th, 2008 at 2:35 pm
Announcement of restructuration for ZLC, too random
47Janet
February 27th, 2008 at 2:38 pm
This one is really kewl to watch
http://youtube.com/watch?v=jwMj3PJDxuo
48Joseph
February 27th, 2008 at 3:02 pm
Hey Tim,
AXTI is your typical boring stock, but it’s up 22 % on earnings, great volume…How do you think it’ll do tomorrow? oh btw I’m thinking of buying your book, but if the dvd package comes with the book I’d prefer to buy the whole thing at the end of this semester. Thanks
49timsykes
February 27th, 2008 at 3:12 pm
Yah the DVD comes with an autographed book so just hold out a bit longer. I never touch earnings stocks unless they’re true blowouts that can run for several days, AXTI is not one of them, can go either way, not predictable
50timsykes
February 27th, 2008 at 3:19 pm
now thats a CPST breakout