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Stock Pumps: How I Capitalized on This Sketchy Stock

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Written by Timothy Sykes
Updated 1/26/2023 9 min read

Today we’re talking about stock pumps, and how I capitalized on a sketchy stock … it was one of the best morning panic dip buys I’ve seen all year.

There hasn’t been a hot sector in a while, and since the SEC cracked down on pumps, this pattern hasn’t shown up for a couple of months. And many of my students got lazy with their studies…

I’m sad to say … many students weren’t prepared for the perfect bounce on Rivex Technology Corp. (OTC: RIVX).

Rivex Technology Corp.

If you look at a daily chart of RIVX, it’s clearly a pump. If you’ve never looked at a pump before — burn this chart into your memory.

RIVX stock charp
RIVX daily chart — courtesy of StocksToTrade.com

RIVX originally hit my radar because one of my millionaire mentors, Micheal Goode, posted a report about RIVX on November 7, 2019. In the article, he discussed how the promoters started pumping up the stock price on November 4, 2019, using two websites and email promotions.

Honestly — I don’t care who’s promoting a stock or how. I’m only looking for strong promotions that panic hard in the morning, so I can capture a 20%–50% bounce. This pattern can be very predictable and has often worked well for me.**

Dip buying a pump on its panic day is actually one of my favorite patterns. During the promotion, I never would’ve bought any shares. The current promotion environment is too risky to long pumps. Ten years ago, promoters were awesome! They’d pump stocks like RIVX all the time but bring in substantially more volume.

Today, many of my top students short pumps because they don’t last very long.

The market could really use some better promoters to bring back more high-level plays. But they got greedy. Now the SEC is cracking down on promotions, so I don’t long them until the morning they panic.

Morning Panic Dip Buy

RIVX had been on my watchlist for nearly three weeks by the time it panicked.

I gave students three weeks to prepare for this play, but the morning of the panic … they were still unprepared.

I even had students emailing me using delayed charts and asking why my price was so different from the one they could see. If you’re going to take trading seriously, then you need to use this revolutionary tool. Using the wrong tools can damage your trading career because you’re using old, outdated information. It seriously makes a difference.

Anyway, when the morning panic came … I was ready.

rivx 5 minute chart
RIVX 5-minute candle chart — courtesy of StocksToTrade.com

As you can see, RIVX opened at $7.11 and quickly panicked down to $3.11. This is perfect! The larger the panic, the bigger the bounce.

I tried to buy as close to the bottom as possible, but it was kind of illiquid, which made fills difficult. I managed to fill 1,000 shares at $3.81.

For this play, I was only looking for a quick 10%–20% bounce because my entry wasn’t perfect. When it started to bounce small, I got out at $4.31 for a sweet $464 profit.** Check out my verified trade here.

If the volume had been a little better on this play, I would’ve had more confidence to hold longer. I mean look … it bounced over 100% when the Dow was down 200 points! This is why I love penny stocks. 

RIVX 30 minute stock chart
RIVX 30-minute candle chart — courtesy of StocksToTrade.com

In hindsight, I totally underestimated this bounce — but I understood the pattern and took a single. Rather than swinging for the fences, I locked in the predictable gains, and I’m more prepared for the next stock to morning panic.

Study the Past

The saying “history doesn’t repeat itself, but it often rhymes” is extremely applicable to the stock market.

The market goes through cycles, and so do patterns.

Sometimes, the market is perfect for shorting overextended stocks. Other times, when there are over-aggressive short-sellers, short squeezes increase, providing excellent opportunities for my long-biased students.

In short, it’s essential to always be aware of market conditions and understand what’s working in the current market.

But only learning what’s working right now isn’t a recipe for success. The patterns I teach students in my Trading Challenge are time tested. Sometimes these patterns work and other times they don’t — that’s just how the market is.

The key is to study the past to be prepared for the future. I have over 6,000 video lessons in my video library and over 600 for dip-buying alone!

There’s absolutely no excuse for students to miss this pattern. I can only think that they’re just lazy. They didn’t study properly and didn’t understand this pattern because it hasn’t occurred regularly in the last couple of months.

Shame on them. They need to buckle down and focus. Trading isn’t easy, and over 90% of new traders fail. That’s why it’s so critical for you to take your education seriously.

Prepare for the Next Morning Panic

RIVX is approaching its highs again, so I’m keeping it on my watchlist. Often times, the first-morning panic play is the best one, but subsequent morning panics can provide excellent trading opportunities.

How can you prepare for the next morning panic?

I’d start by reviewing the pattern over and over again. Here are 8 examples of morning panics to get you started.

Don’t be a lazy person and wait for my trade alerts. Understand the potential of these bounces and learn how to find them. This isn’t rocket science, but you have to prepare.

Recent Tweets, Comments, and Trades From Students

Fortunately, not ALL of my students were unprepared. Still — far too many didn’t study. Use these students as inspiration! How will you prepare for the next play?

From the Trading Challenge Chat Room

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December 2: 

9:31 AM Jackaroo: RIP $RIVX

9:37 AM BigDog: $RIVX in 3.11 out 3.7 sold way too early, thank you Sykes

9:41 AM Reese: Sold $RIVX at 4.69 on the first sign of weakness. Took the meat of the move. Thanks Tim.

10:06 AM alfalien: as long as humans are greedy and stupid with markets in general, there will always be pumps. low volume or not $RIVX. pattern will never die

10:08 AM GOO: yes long live the $RIVX pattern

More Comments from the TimAlerts Chat Room

December 2: 

9:36 AM Androo: $RIVX all out $4.37 , but position size was too small

9:34 AM Androo: dip bot $RIVX at $3.12

11:18 AM Terrynho: Hold till $6s, then got out. Thanks a lot Tim

December 3:

10:17 AM CKP111: but it’s really funny looking at it $RIVX

11:40 PM Skiddum: I don’t know about you guys but my main watch tomorrow morning is $RIVX Tim’s video on that guy makes me want to watch that guy for dip buys.

Michael Goode, one of the TimAlerts millionaire mentors, was all over RIVX. For weeks he kept the chat rooms informed about RIVX. Great job, Michael! Crazy how you used to think I was a scam and now you help my students nail these plays!

December 2:

9:42 AM MichaelGoode: $RIVX I don’t like buying on the 2nd drop as much as on the first, especially with large spread / poor liquidity

December 3: 

9:27 AM MichaelGoode: $RIVX promotion continues too

December 4: 

9:27 AM MichaelGoode: $RIVX got my pump email

I Love Seeing Successful Student Tweets

[**Please note these results are not typical. These traders have exceptional knowledge and skills that they’ve developed with time and dedication. Most traders lose money. Trading is risky. Do your due diligence and never risk more than you can afford.]

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Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (205) 851-0506 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”