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Trading Lessons

4 Stocks The Shorts Could Take Down

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Written by Timothy Sykes
Updated 7/25/2023 5 min read

Picking up pennies in front of a steamroller…

That’s the life of a short seller in this market.

On most days, they’re collecting money left and right.

But play the game long enough, and you’ll eventually get steamrolled…losing a substantial amount of capital or all your trading funds.

The problem with short sellers nowadays is that it’s becoming a crowded field…

In other words, to capture the gains they were once accustomed to, they have to start earlier, and, in many cases, their overaggressive behavior is creating some monster trading opportunities for longs like myself.

But there comes a time when shorts eventually gain control, and longs lose interest.

And I’m starting to see it now in four stock runners…

Number #1: Gorilla Technology Group (NASD: GRRR)

Over the last month, the ticker GRRR rose from a low of $1.82 to a high of $6.98…it’s now struggling to stay above $2.

It’s been heavily pumped by promoters and has had a series of press releases (PR) over the last month.

The latest PR was on July 20th, when the company announced a strategic relationship with British Telecom for an AI-powered innovative port solution.

Source: StocksToTrade

I traded it that day and eeked out a 3.6% winner.

However, there’s one thing I’m noticing that is making me less interested.

The bounces are getting weaker and weaker. 

You would have thought the British Telecom news would have sparked a significant rally…but it didn’t.

It appears that the shorts are back in control with this stock.

However, many of them probably got burned from shorting at $2 to $6…they’re not aggressive…and why the short is working.

I have it on my watchlist as a potentially long, but it has to be an EXTREME panic for me to get interested because the stock is slowly grinding lower.

Number #2: GreenPower Motor Company (NASD: GP)

This stock posted what I thought were solid corporate earnings. The company lost less than the previous year, – $0.64 vs. -$0.69.

Unlike the GRRR chart…this one isn’t nearly as ugly.

However, interest seems to be declining.

How do I know?

If you look at the trading volume, you’ll see it’s not getting nearly the amount of action as it was a week ago.

Moreover, it is experiencing higher lows.

In other words, the daily highs have been lower than the previous…

Which has been ongoing for about a week now.

Source: StocksToTrade

Number #3: D-Wave Quantum Inc. (NYSE: QBTS)

This former SPAC has moved from a low of $1.53 to a high of $3.20 over the last month.

It has been mainly a sympathy play to IONQ, but it is losing momentum like the other stocks on the list.

Source: StocksToTrade

For the downward trend to reverse, I’d like to see it hold above $2.50.

I would like to see this go below $2 in terms of panic dip buy opportunities.

There’s no reason to chase or get involved when a stock is experiencing relative weakness.

Number #4: Knightscope Inc. (NASD: KSCP)

Source: StocksToTrade

This is probably the crappiest stock on the list…

But it did rally by 20% yesterday.


Because of overaggressive shorts.

Despite the stock trading well below its recent highs of $2.34…

Shorts are not out of the water yet.

In fact, if this can get above the $1.50-$1.60 range…there’s a chance it will make another run.

However, it doesn’t, there’s a chance to return to the $1.10s.

I’d be interested in a panic below $1.

But again, there’s no need to rush any of these plays.

Final Word

Fundamentals do matter in the long term.

However, they don’t matter as much when you’re in a trade for a few minutes or hours.

Price action is king for the short-term trader.

I’m losing faith in the four stocks mentioned above because the rallies are weakening.

Moreover, it’s another sign of a severely overbought market environment.

If you’d like to receive free trade ideas from my team…

It’s simple: sign up here. 

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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 (888) 878-3621 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”