Welcome traders,
I made another classic trade yesterday using the same patterns as always.
It’s like clockwork in this market!
Every day I wake up and look for big-percent gainers. Then I scan the price action for key areas of support that match my trade patterns.
Here’s how it went yesterday, I took a 9% profit:
This biotech stock is a huge former-runner.
The history of spiking was a hint that the price could push higher after I bought shares. In total, the price spiked 75% on Thursday, November 7.
I’m perfectly happy with a 9% profit … I’m not trying to catch the whole move. Nobody knows when these spikes will reverse direction.
The goal is to take the meat of the move when the chart matches our popular patterns.
Today, I’ll show my exact position on this volatile biotech stock.
Burn this pattern into your brain! We’ll likely see another opportunity this week.
Volatile Biotech Spike
Biotech stocks are HOT right now.
The spikes aren’t reliable over a long term, but we can trade the intraday volatility for profits.
The biotech sector is overwhelmingly volatile right now partly due to the 3,000%* spike from Bright Minds Biosciences Inc. (NASDAQ: DRUG) in mid October.
These follow-up biotech spikes are a result of the immense moves from other stocks in the sector (DRUG).
Short sellers keep trying to ride this momentum lower. And it sounds like a good strategy, these biotech spikes are unsustainable.
But … If there are too many short sellers in the stock, any bullish momentum could squeeze some of them. And that causes a domino effect of short sellers blowing up. As a result, the stock skyrockets.
It’s especially common on low-float biotech stocks, because there’s a limited number of shares.
Anything below 10 million shares is considered a low float.
StocksToTrade shows that DRUG has a float of 4.4 million shares.
And the biotech stock that I traded yesterday, Ensysce Biosciences Inc. (NASDAQ: ENSC), has a float of 8.3 million shares.
The low float explains the immense volatility we’ve seen on ENSC since October 22. And it lends itself to volatility in the future!
Take a look at the multi-day chart of ENSC below, this is a 380%* spike! Every candle represents 10 minutes:
Notice that the price is still up …
There will be more opportunities to trade this stock.
Let’s take a look at my position from November 7 so that you know what to look for.
My ENSC Trade
My millionaire students and I trade with the same patterns over and over again.
They’re based on human psychology. See, people are predictable during times of high stress. Like when they have cash in a volatile stock.
Their stress manifests in the form of popular patterns.
My millionaire students learned these patterns after studying tons of trades. Every spike is a little different, and traders need enough experience to recognize the patterns in real time.
But my newest students can follow the AI trading-bot instead …
Ever since AI exploded on the scene in early 2023, I knew it had the potential to help my students learn this process.
So … Over several months, I fed the AI trade after trade. And eventually, it caught on!
>> Prompt my AI trading-bot with the ENSC ticker <<
It will spit out a trade plan as if you asked me directly!
One of my favorite patterns right now, and a pattern the AI might suggest, is dip-buying shares after a big spike.
For example, on November 7, I watched ENSC spike in the morning, but I didn’t buy shares until it fell lower and started to show signs of consolidation.
That level of consolidation was my risk level. That’s where I would sell if the trade fell apart.
But, because I only focus on the best plays, these stocks often follow my trade plans. I track all my trades on Profit.ly, where it currently shows that I have a 76% win rate.
Again, here’s what made ENSC the best play of the day:
ENSC was one of the hottest spikers on Thursday morning with a history of spiking. It’s a biotech stock. It has a low float. And it started to follow my trade pattern.
Here’s what my trade looks like overlaid on the chart, every candle represents one trading minute:
Keep ENSC on your watchlist this month!
The stock will show us more volatility in the future.
Here are some things to watch:
- The Nasdaq extended ENSC’s form 10-Q filing deadline to November 14.
- It also received a deadline extension for the minimum bid-price requirement until December 19.
This is a sketchy stock, lol. It can barely stay listed!
That’s why short sellers are targeting it …
Get ready for more squeezes!
Cheers.
*Past performance does not indicate future results
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