Short Selling Games: How To & Not To Short A Morning Spike
Posted by timothysykes on Wed 25th of Jun, 2008 12:41:30 PM
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Each of the past two mornings, I’ve shorted Uranium Resources, Inc. (URRE)—mainly cuz it’s up so much and its horrendous long-term chart and level 2 price action tells me there’s a ton of bitter shareholders looking to sell on these bounces. This 100% stock price spike naturally has brought in the short sellers, many of whom are complete morons, thinking it’s gonna collapse at any moment and I gotta thank God for their existence cuz their premature entry and inevitable squeezing is what causes these morning spikes.
Yesterday, I wisely waited for a nice wall of sellers to enter—meaning there was plenty of overhead resistance, even during the spike, shorting 1,500 at $4.05—even though it was off the day high by 20 cents…I wanted 30 cents of downside and got some of it, but when buyers seemed determined in the $3.85 range, I said to my self “can’t be greedy, this isn’t an I deal play” (it wasn’t negative on the day nor the afternoon). Covering at $3.90 it was a decent $200 gain.
Today, I got greedy. Wanting to make $150 so I could get to $20,000 before quarter’s end—classic amateur psychology and not waiting for a wall of sellers—I shorted 1,500 shares again at $4.40, thinking that this morning squeeze would surely collapse. Immediately and as I wrote in the email I sent out to TIMalert subscribers, I knew my entry was sh#@…friggin greed man, friggin greed! But in the grand scale of this stock’s price action, it wasn’t that bad…
Just a few minutes later at $4.60, I thought about taking the loss, but rationalized this was just a morning squeeze and right then–thankfully–the wall of sellers came in (ideally TIMalert subscribers got in here at 4.50-4.60) and the price gradually retracted to the $4.35-$4.40 range…but no more…I gave it another 20 minutes—an eternity in a non-ideal play—but when it showed signs of bototming, I got out around $4.39, $4.40, a loss of $2, yes two dollars.
Stock lasted another 5 minutes in that range, but the sellers were too many so it crashed down to the $4.15 range where, other than one bounce attempt, its stayed and it only gotten weaker, now negative on the day at $3.85 (just cracked massive 2-day support at $3.90)(1PM lunch meeting is gonna ill my chances at catching a probable further afternoon fade…part-time trading is a bitch!)
Funny thing is even though I played it correctly the first time, it was so quick TIMalert subscribers didn’t profit much…not that there was much profit to be had…especially since sometimes emails take a few minutes (working on a solution to that)…now that my timing was off today, but it was the big tank day, subscribers banked 15%+ over the past 2 hours and had plenty of time to get in…strange how that works, huh?
Not that it really matters, but the better stocks to short this morning were the speculative oils like Royale Energy, Inc. (ROYL), Tengasco, Inc. (TGC) and Pyramid Oil Company (PDO), all somewhat predictable by Mexco Energy Corporation (MXC)’s breakdown yesterday—no negative Citron report required!
Now you can Twitter any questions/comments to TIMhelp and obviously you can follow TIM on twitter too!
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TIM Alerts
View All| Date | Stock | Position | Ideal Exit | % Gain |
|---|---|---|---|---|
| Nov 24 | KVHI | Short | $3.70 | 18% |
| Nov 20 | STSX | Short | $3.10 | 11% |
| Nov 18 | PERY | Short | $3.75 | 25% |
| Nov 11 | IIJI | Short | $2.80 | 5% |
| Nov 6 | CVI | Short | $4 | 15% |
| Nov 5 | MECA | Short | $1.95 | 51% |
| Nov 4 | CVI | Short | $4.81 | 4% |
| Nov 3 | NAK | Short | $3.20 | 5% |
| Oct 29 | EVC | Short | $2 | 26% |
| Oct 28 | HSNI | Short | $6.80 | 7% |
| Oct 28 | HSNI | Short | $5.75 | 4% |
November: 9 alerts, 15% avg gain
October: 11 alerts, 14% avg gain
This is reason for NYNY spike today.
Hot Stocks story about NYNY
Empire Resorts and Concord Associates announced that the New York State Legislature has approved Governor David Paterson’s program bill granting an enhanced revenue structure to cover expenditures, which will make possible a $1 billion dollar world-class gaming resort destination at the site of the historic Concord Hotel in Sullivan County, N.Y. The project is scheduled to open in 24 months. Demolition of the existing structures will be completed in July, when new construction is slated to begin.
What time is best to trade??
when your stocks have gone way, way up in value?
Where are all the superstars? … Tony Ellis et al.
I’m looking for good breakouts..not seeing much today
CTB looks like an intersting short play. 8.80 intraday support. I don’t think it can hold its gains on the upgrade today.
lol…I’m looking too!
LNG getting action now. Quick 15 cent pop at highs of day of 5.10
anyone watching EFFC?
VISN looks good today, pretty strong
Well, if Tony Ellis doesn’t see any breakouts then there probably aren’t any.
Tony E check out BQI t/a. please give me your opinion.
nevermind on EFFC
VISN looks pretty good - could use more volume though
im going long on VISN 300 @18.55
VISN is known to lose all its gains. Look at the 10 day. Can’t crack 19.
XFML could be a runner. Triple bottom bottom last 3 days off of 2.20.
SQNM making another nice spike up. Don’t even bother shorting this has been a long play since 9.
PDO broke under 34 again. Will test 30 in the morning then bounce off of that number.
VISN, ASIA and FEED are dead to me! lol
anyone know what’s up with JUHL? Just wondering not a recommendation.
I can only see one day of chart action for JUHL
JUHL…reverse merger…CEO on Fox Business this morning. I almost bought @ 1.40
WWAT nice pop, better volume than I’ve seen in a long time, based on meaningless press release. Scalped up for a quick $75 gain today, but buyer beware, it’ll fade for sure. I know ‘cuz I am still holding a long position and so far have gotten dry humped on it
lol - CEO on Fox expains it - could be a great short - someone tell Timmay!
I believe I will short that fucker WWAT right back down where it came from this morning. Weird, being long and short on the same POS stock.
Tony - I’m curious as to why you almost bot that at 1.40
LDK at 42 is going to get wild. I know this stock and something big is building up. Huge rebound from morning lows.
Actually 1.70…I say almost, but not really just thought about it because it traded a lot of shares for an OB and it was a new wind play. Definitely, would not have been a disciplined or high percentage play.
IDAE.OB beautifully manipulated chart. Am I right?
How did we miss SQNM breakout?
TonyEllis…you going in IDAE?
hey Fantom-
how’d you make out in the housing sector? Ended up covering 500 DHI @ 2.65, down from $3.10 avg, $225 profit less my costs, not too bad and it was good for a laugh. I hope I said that quiet enough, don’t want Sykes getting all worked up again- no disrespect of course. I hope he had a good lunch @ Plaza
ah shit, couldn’t find WWAT to short. If anyone else can, grab it with both hands
WWAT shorts available at IB
Tony–IDAE has vol. increasing and on an uptrend. I would be afraid to buy and afraid to short-until sign of weakness. What are your thoughts?
PCola- thanks! & good luck trading
hehehehehe my EGO got bruised today. Nice to see I can laugh at my losses too
SQNM nice afternoon fade….
Kris…IDAE looks manipulated to me. Two months without a down day? I wouldn’t play it either way. These things can keep going up or collapse and I haven’t figured out how to predict it.
ok…thx for your thoughts! i did not want to touch it, unless, hehe, it starts to look weak.
Finally some of my scalps are coming through. CTB cover for $.30. My guess was right. Today is a scalp day as no real movers out there that I know of.
MBI only got $.10 from that one. Underpeformed my expectations by $.90.
APWR up $1.20 on that one and covered. $.80 below expecations.
LNG was a $.05 loss. Low volume move on resistance break wasn’t strong enough to hold it above 5.
LDK is finally busting through. 43.40 up 1.40 on this one. This stock is taking out day highs now.
Buying URRE here at 4. Uranium plays are not dead. Will sell fast if it goes under 3.90. Cut your losses quick.
Wacky action now, energy was in the shitter all day, but where ya gonna turn? Energy, that’s where. Reloaded BQI @ $6.05
lol - IDAE is unreal
SQNM - maybe an afternoon rally?
SQNM I am short @ 16.18— I believe this will have a pull back….will hold until the end of the week if necessary- or tomorrow may be all it takes.
picking on the financials again. Short 100 TCB @ 12.88
Out of URRE for a quick $.14 scalp. Love high volume movers. If it’s not liquid what’s the point.
Forgot about HIRE. Turned out the 17.60 offer was legit as later was released. $2 more than original. Out cost of commissions.
Waiting on LDK as my only open play. Hoping for 48 tomorrow as this was previous resistance from last big spike up 2 weeks ago.
Grabbed some TSO at 21.55. Buy the refiners on the oil drop.
who let da bulls out?
Short IPI at 67.45.
Sniper6
I am truly his stubborn student. I still refuse to cover. The industry owes me money and I shall have it. Their balance sheets are red and in that movie there will be blood!
They will expose it. We shall see the outcome Thursday-Monday! The housing sector is in the gutter, soon it will show.
Covered IPI at 65.30 from 67.45 for a quick $2.15 scalp.
Sold LDK at 42.85. +$.85. Will revisit it tomorrow.
Sold TSO at a $.20 loss.
I’m done with for the day.
Good luck to you all.
just got back form a great lunch, IDAE, yes, i’ve covered it…SQNM, yeahhhh told everyone not to short back at 9,10,11…JUHL could be multi day runner…URRE sad that it came back….no more trades for me today
look at COIN breakdown