Here’s a huge question I hear a lot lately: “What are the top trading patterns in this coronavirus market?”
No doubt, the whole world seems crazy right now. So, first I want to say that I hope everyone is staying safe and staying home. My thoughts go out to everyone affected by this virus.
I’m sheltering in place on the West Coast right now, in the time zone I dislike trading in the most … I’m just not a morning person. My Wi-Fi is also glitchy since so many more people are home and on the internet. But none of that has stopped me from trading.
And even though the overall market is down, penny stocks are HOT. They’re so hot that “U.S. News and World Report” wrote this article about my favorite niche and how my students and I trade it.
There are TONS of opportunities in the coronavirus sector right now. It can be overwhelming. So if you’re wondering where to start … read on for my top trading patterns for this market or any market.
Table of Contents
- 1 Where Should You Start?
- 2 What to Focus on in a Crashing Market
- 3 My Favorite Trading Patterns
- 4 More Top Trading Patterns
- 5 Conclusion
Where Should You Start?
The best place to start is to use your time at home to study and learn the markets.
Start learning about penny stocks by reading my free penny stocks guide. It’s 11 chapters of key information to help you get started in the market.
For more in-depth lessons on my key trading patterns, check out my “How to Make Millions” DVD. (All proceeds from “HTMM” go to charity.) It’s my most complete trading guide. I go over how a world crisis and hot sectors can provide a lot of opportunities.
Also, read “The Complete Penny Stock Course.” It’s written by my student Jamil and based on my strategy and lessons.
All these resources can give you a solid foundation. And once you have the basics down, you can start to focus on key trading patterns that present the best opportunities.
What to Focus on in a Crashing Market
Right now, people are losing their investments and retirement savings. It’s devastating. It’s also why I don’t stick to mainstream strategies.
So what do I do when the market is crashing?
I trade strategically. I trade like a sniper. I stick to my trading patterns and I stick to my niche. That’s how I’ve built my fortune.**
I made $15,439.20 last week.** Even though I’m trading in a time zone I hate and with Wi-Fi cutting in and out. Check out all my trades on Profit.ly.
[**My results are NOT typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.]
How do I do it? I focus on my top trading patterns and big percent gainers. That’s the best place to start. Find the biggest percent gainers by using StocksToTrade. You can check it out with a 14-day trial.
Wow what a stock market we have this month, the crash was awesome and so now is the bounce, very grateful for all the opportunities!
— Timothy Sykes (@timothysykes) March 27, 2020
You also need to…
Learn How to Trade Hot Sectors
Most people underestimate how high stocks in hot sectors can go. These stocks can have legs — and they can go higher and run longer than you think.
Right now, the coronavirus is creating the hottest sector we’ve seen in years. It’s bigger than the bitcoin craze and pot stocks.
Companies releasing news about anything related to the coronavirus can spike big. That can be producing masks and protective gear, developing tests, or working on a vaccine.
You also should watch for sympathy plays in other stocks in the same sector. If one is running, others can start to run too.
But there can be so many stocks moving you may not know which one to trade…
Now, let me break down my favorite patterns for you and give you some recent examples…
My Favorite Trading Patterns
If you’ve watched any of my video lessons, you know I have a few favorite trading patterns…
Let’s start with one of my favorite patterns.
Here’s what’s great about the supernova: you don’t have to catch the bottom and top. You can catch the meat of the move and move on. That’s what I did with…
Astrotech Corporation (NASDAQ: ASTC)
ASTC is the most recent supernova. Newbie short-sellers were shorting this based on its past history of not holding its highs. They were shorting it in the $3s since it was up from about $1. Check out the chart…
Again, these hot-sector stocks can run longer — and higher — than you think. Just because a stock failed in the past doesn’t mean it will fail right away. Especially when the stock’s in a hot sector with news.
ASTC eventually failed … But not before ripping through all the shorts up to the high $7s on a giant short squeeze.
Too many newbie short-sellers just don’t know the risks of this strategy. I have enough experience to know the dangers.
A morning spike can happen based on a news release or it can be a short squeeze. Let’s look at an example…
Predictive Technology Group, Inc. (OTCPK: PRED)
I bought this morning spike on the third green day, which isn’t ideal. But PRED released news about a coronavirus test … and it’s a former runner. You gotta know former runners.
First, check out the chart:
I bought PRED at 85 cents, hoping it could go to $1. It didn’t. I got out at 94 cents when it looked like it was stalling out. I took my single and got out. I made a few hundred dollars on a partial position.**
One indicator that a stock can run is when it’s already spiking. You don’t need to predict a stock move and you don’t need to be the first in the stock.
Dip Buying Recent Runners
You need to keep recent big percent gainers on your watchlist. They can give you more than one trading opportunity. That’s what happened with…
IMAC Holdings Inc. (NASDAQ: IMAC)
IMAC was the biggest winner on March 24. That’s when it announced it was launching a telehealth option. The new system allows patients to communicate with medical professionals without leaving home.
Here’s the chart:
The stock spiked from 40 cents to $4.95, then into the $5s after hours. I didn’t trade it on the first day. It was halted almost every five minutes due to volatility. But when it was coming down the next morning, it fit my morning panic dip buy trading pattern.
The second day, it opened at $3.15 and panicked down to the $2.60s. I bought at $2.87 when it looked like it had bottomed out. It was down approximately 40% on the day.
There was so much volume traded on the first day. So I thought there could still be room for it to bounce, and it did. It was halted on the way up due to so many buyers.
After the halt, I sold at $3.40 for a profit of $2,650.**
There were newbie chat rooms buying the stock after the halt, thinking it would go back to the $4s and the $5s. I sold into those buyers. I feel bad for the newbies who don’t know better … But I’ll also profit when I can.
(**Please note: my results are not typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.)
Even though I had a stellar week in trading, I still had some losses…
T2 Biosystems Inc. (NASDAQ: TTOO)
TTOO has a terrible long-term chart. I can see the newbie short sellers drooling over it. But you can’t underestimate stocks in a hot sector with news.
The stock was spiking after hours on news of a coronavirus test. My Challenge students nailed buying the spike along the way from around 40–80 cents. I missed the initial runup.
If you’re not in my Challenge chat room, apply for my Trading Challenge. I don’t accept everyone … I’m looking for the most dedicated students. It’s my honor to teach — but I don’t want lazy students.
By the time I saw TTOO, it was on its first pullback. I dip bought it in the $0.70s and I added in the $0.60s. My average was 71 cents. I was hoping it could run back up to its highs in the $0.80s or $0.90s.
While I was in this trade, my Wi-Fi and quotes were cutting out. The stock kept going down so I cut my losses. It did eventually get back to the $0.80s, so I was on the right track.
I’m OK with this trade, and it teaches valuable lessons. You have to remember everything that can affect your trading — like Wi-Fi issues, FOMO, and exhaustion.
More Top Trading Patterns
Here are a few more key trading patterns worth mentioning…
Shorting the First Red Day
Short selling is NOT for newbies. This strategy is very risky. You can lose the money you have in the trade and far more. You can blow up your entire account if you don’t cut losses quickly.
I don’t recommend shorting right now. There are so many newbie short sellers and short-biased chat rooms led by newbies. Be careful of who you follow.
And if you insist on shorting, do your research. The first red day can be a good pattern here … But do your homework first.
The first red day follows a stock’s huge run-up, like a supernova. After multiple days of running, the stock opens below the previous closing price.
This gives long traders a reason to worry and start exiting. As the stock goes down, people start panic-selling. Short sellers jump in to push the stock down further.
If you short sell, stick to stocks that are red on the day. Don’t try to be a hero and short a stock running on news in a hot sector.
A multi-day breakout is a trading pattern where a stock tops out around the same level for multiple days on the daily chart. Then one day, on higher-than-normal volume, the stock breaks out over the resistance level. The new price level on the stock brings in new buyers.
It also forces shorts to buy to cover their positions as the stock makes new highs.
Breakouts can be powerful moves on high volume and with a news catalyst. They can also be on a new all-time or 52-week high. New price levels bring more traders to a stock.
Too few people realize how many opportunities there are and much money you can make during a market crash of you’re prepared and stay rational while everyone else is freaking out…much better valuations now too, healthy for the market in the long run!
— Timothy Sykes (@timothysykes) March 26, 2020
The coronavirus plays are in a hot sector. It’s the same as the crypto, bitcoin, and weed that ran in the past. As soon as a company mentions the sector, the stocks move. It’s amazing.
I’m putting my top trading patterns to good use. But it’s not just this crazy market, these have been my go-to patterns for years. They’re not always the same — that’s why you have to study. It’s not about memorizing the patterns, it’s about understanding them. Then you can adapt to any market.
This is my best trading month in years. But I’m getting a little burned out. Keeping up with the fast-moving market can be exhausting. Make sure you get enough rest and don’t overtrade.
Timing is everything. These stocks move quickly, so you might miss executions. Remember not to chase.
We don’t know how bad this will get. We don’t know how many people will be affected. I’m not a doctor or an expert on viruses, but I do understand exponential growth.
People don’t take small numbers seriously — but when they grow, people pay attention. Whether it’s a virus or profits.
When my student Tim Grittani started trading, he’d make about $50 profits per trade. Now his account has grown to over 10 million dollars.* That’s how exponential growth compounds.
I hope you stay safe through the coronavirus pandemic and in trading.
[*Note that Tim Grittani’s results aren’t typical. He’s put in the time and dedication and has exceptional skills and knowledge. Most traders lose money. Always remember trading is risky … Never risk more than you can afford.]
What trading pattern makes sense to you? Let me know in the comments … I love to hear from my readers!