Hey, I May Be Stupid, But I’ve Got A Great Strategy, aka Anyone Can Do This!
Posted by timothysykes on Thu 28th of Feb, 2008 01:26:57 PM
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TIM $16,006, Up $318, Bad Entry, Pathetic Exit, Decent Profit, Welcome To My Life
How can anyone want to buy a crap stock—with thousands of bitter shareholders who bought in at much higher prices now looking to sell on any bounce—that’s tripled over the past 2 days without any news and now has fading volume? OK, some people will—maybe they “know something”—but the odds are definitely against them. There’s simply too much overhead resistance, and that usually crushes the price within days. Kinda like a midget trying to hold up a basketball player for very long:
As I’ve posted for the past two days here and here (scroll down to the bottom of both posts) Dara Biosciences (DARA) exemplified this tired midget pattern. Well, DARA the midget has actually been stronger than many short sellers, including me, expected—good thing I couldn’t find any shares to short until today when I reserved 1,000 shares to short. The morning spikes are caused by those early short sellers getting squeeeeezed.
I wanted to short immediately at $4.90 because I thought this stock fades to $4-ish in a few days, but I knew I had to wait due to the probable morning spike. All pre-market long it rose 50 cents or so—on some fluffy new director news—and I waited…but the selling was constant that I was compelled to show off my impatience/undiscipline by shorting 917 shares at $5.35. Whoops, right after I shorted, a 5,000 buy block came in and stayed there for 20 minutes. Stupid early short! Luckily, Thinkorswim had more shares to dole out so I borrowed another 600 shares and decided to add on the way up, if need be. Need be there was as the stock spiked to $5.80ish right near the open—as I cursed my early entry—but I didn’t want to add until over $6 to get my average price really up.
When the basketball player-size big block sellers swarmed $5.60, $5.65, $5.70 and $5.75, I, along with other short sellers and lots of hesitant buyers knew the run was over. I added 500 shares to my short at $5.53—making my 1,417 shares short at an average of $5.42 a ridiculous 50% of total TIM assets—and watched as the midget buyers collapsed, all the way to $5 within three minutes. (C’mon, how perfect is this analogy?!?!)
It bounced a little, but I wanted a crack of $5 so I held, and felt encouraged when some big block buyer at $5.30 got taken out quickly by the sellers. But only a few minutes later, some big block buyers came in at $5.05 and $5.10 and I said screw it—I shouldn’t be in this thing during the morning anyway—buying to cover at $5.15. Profit of $318. TIM over $16k, another all-time high. So what, this was a true panic exit. Pathetic. Disgusting. Amateur. Bush league. Call it what you will, you’d be right. After I bought, the big block buyers disappeared, proving some short sellers placed fake orders to scare up some buying for them to short into and add to their positions. Gotta love those games.
No matter that I had a ton of other stuff to do, and no buying power/day trades left, I forced myself to keep watching as a kind of punishment for being so quick to exit such a perfect pattern. Within 30 minutes, it did crack $5 and my profit coulda woulda shoulda doubled. It’s a shame, I entered and exited poorly and yet I still made 5%…ahhhhh PennyStocking (Damn right I’m gonna link it in every post, I love it , but as you can see I’m barely scratching the surface here, somebody’s gotta be able to do it better, right?)
Despite the down market, daring DARA has managed to hold onto $4.90 and stay positive, albeit slightly, on the day…not sure how much longer it holds. Hopefully this midget can find one last surge of energy to confound the shorts and spike its stock price into tomorrow (odds are against it, remember, DARA’s little midget arms, aka buyers, are getting verrrrry tired) because I have meetings and won’t be able to trade the rest of the day. (Yup, trading this little $16,000 account isn’t my primary source of income. Shocking, I know! Although just under $2k in earnings this month ain’t too shabby)
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
LOL—- loving the graphic Tim
Hi,
Good job !!!
What is your primary source of income ? Do you have an another account ? Do you use the same strategy with this account ?
Thanks
Thanks, no other trading accounts–my $600k is locked away in Swiss Francs, euros, gold, bonds and some dollars. My primary income is my book, DVD and advertising, surprisingly, it adds up and I’m just getting started…
Tim- I love your Entrepreneurial ship - My goal is to try to make at least 1k a day….I think it’s very possible..once I am able to day trade-almost at that limit- I am free as a bird- quit this worthless job– It takes up my time to make more perfect trades
Tim AGIX is up close to $1 now up over 20% Tim you got to like the chart now.
Would it be a bad idea to short DARA overnight, or do you think there will be another short squeeze in the morning just like today? I hope Scottrade wont screw me again if I find a good chance to short. Im going to TOS soon.
AGIX is breaking out BUY IT
Looks like DARA is having late day run here, you might get the pop you were looking for.
Tim, could you explain what you mean when you say you reserve shares to be shorted later? I just signed up for TOS so I’m not yet familiar with the interface, but I’m curious if this is something only TOS offers or is something of which I am just ignorant. Thanks.
for a late-day rebound??? Anyone??? good luck!
oops! I mean for SEED!
Dav what don’t u understand about me not giving a crap about AGIX until it show me some real volatility? Look at my biggest success, IDMI, SHV, DARA, all up 200%+ in the days prior.
DARA, shorts forgot that it still hasn’t had a down day yet, even though it looks like these stocks should go straight and straight down, it doesnt work that way, usually need sideways price action for a bit first, only reason i made $ is cuz i shorted into the spike–not very well–but thats the only way to play until that sideways price action is breached…hopefully it squeezes them more into the close or tomorrow morning. Even it fades now, possible morning spike tomorrow.
Any thoughts on LGDI , I just caught the chart, no research yet….anyone?
coin was a good short today……..
Kicking myself for not getting onboard FXPE past few days
Jeff, heres a real kick myself story….
today i shorted MF at 23.50… it started fluctuating from 23.50 and 23.80 so I thought id hold until the morning for a possible spike down, granted I wasnt expecting much so i put in a limit at 23.20, and as I just walked home from class around 330 this sucker dropped 2 bucks a share in the blink of an eye to 21.00-21.15 — (I had 300 shares) FUCK!
also after Scottrade was a pain this morning not letting me short 1000 shares of DARA at 5.85 … were I’d cover at 5.07 missing out on about 800 bucks profit.
Dude, OUCH! Currently watching on the sidelines: LGDI, DARA, SUPG for breakdowns/breakouts. CPST keeps stairstepping…
Tim,
Need an opinion on KRY. It’s up 20% on some fluffy news. Shares traded 6,630,325.
kry is not fluffy news, they comforted shareholders for their main project. 20% is nothing anyway, i want a stock up 200%+ in a few days
Martin as for getting TOS to locate shares, check out the forums, i detail the process there
Tim, another Midget walking tall the last two days is ADST up 100% yesterday and another 40% or so today rising from the dead of .19 cents to .59 today on a strategic alternatives PR you can read for yourself, but I view as pretty irrelevant. I would guess it gaps and then craps all the way to under .30s in the next three or four trading days as the giddy home run seekers realize they have struck out again.