Welcome traders,
On Tuesday this week, we watched Bright Minds Biosciences Inc. (NASDAQ: DRUG) spike 2,300%*!
And when there’s a stock in the market with that kind of strength, we often see sympathy plays the next day and even throughout the rest of the week.
For example, on Wednesday, after the DRUG run, I banked on a perfect sympathy play: 180 Life Sciences Corp. (NASDAQ: ATNF).
It spiked 1,000%* yesterday …
Keep these stocks on your watchlist!
I mentioned in yesterday’s blog post that these stocks can give us follow-up profit opportunities due to their intense volatility. Traders who don’t keep track of this price action are actively leaving money on the table …
Here’s a chart of the DRUG price action thus far. It shows Tuesday’s spike from less than $3 to almost $60 in after hours!
And here’s the spike on ATNF, with my Wednesday trade overlaid:
There will be more trade opportunities like this today and Friday!
How To Trade Like Me:
You might have noticed …
I left a lot of cash on the table yesterday. ATNF ran higher after my trade. But I didn’t know it was going to do that.
My goal is to identify areas of likely price action. Then …
- I make a trade plan.
- I get in.
- I get out.
ATNF could have fallen lower after I bought the stock … Nothing is a 100% guarantee in the market.
But my trade plan keeps me safe from that scenario.
Let’s say the stock fell lower. I would have cut the trade when it broke the sideways consolidation that started around 8:37 A.M. Eastern.
Small losses are part of this strategy.
But ATNF was one of the strongest stocks in the market and the chart followed my trade plan. So I sold for a hearty 26% profit!
Take a look at my trade notes below:
Get my next trade alert sent directly to your inbox!
Think about it like this:
Instead of spraying and praying, I trade like a sniper. I wait for the perfect shot, and then I operate according to the plan.
For a visual aid, take a look at my post on X below. I practiced my sharp-shooting skills yesterday with the The Cobra Guard, soldiers who are tasked to protect wild rhinos from poachers:
I made a nice $4k+ on $ATNF early today, but got a bit too aggressive on $VS and lost nearly $1k so time to work on my sharp shooting with this amazing group of soldiers who dedicate their lives to protecting wildlife here in Zimbabwe. Check me out trying to shoot, how’d I do? pic.twitter.com/Opwc1F5Avi
— Timothy Sykes (@timothysykes) October 16, 2024
The Next Runner
These massive stock spikes … they’re short squeezes.
Initially, there’s a bullish catalyst or bullish price action. But then a hoard of short sellers starts to target the stock because it’s a crappy company with an unsustainable spike.
It sounds like a good strategy, but there are too many short sellers in the market right now.
Even a bit of additional bullish momentum can cause short sellers to panic and get out.
Since they have to buy-to-cover, it adds to the bullish momentum and it turns into a giant squeeze.
On Wednesday, ATNF announced bullish plans for its new gaming-technology platform. The stock was trading below $2 and immediately started to spike.
That’s when I knew it was a prime target for short sellers.
The Breaking News system alerted this play too … Traders in our community had a ton of time to build a position on this stock as it shot higher.
And I’m proud to report that a lot of my students were in the right place at the right time!
See the post on X below:
Take a look at the ATNF chart below with the Breaking News alert overlaid:
Get the next Breaking News alert!
That’s where we find stocks before the spike turns vertical.
My eyes are glued to the Breaking News scan today. Yours should be too!
Cheers
*Past performance does not indicate future results
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