timothy sykes logo

Watchlists-Penny Stock Investment Strategy

The Best Trade Opportunities This Week

Timothy SykesAvatar
Written by Timothy Sykes
Updated 2/19/2024 5 min read
The Best Trade Opportunities This Week Thumbnail

Ladies and gentlemen …

The market was closed on Monday in observance of President’s Day. That means we have a shortened trading week …

In the middle of the hottest market since the 2020 rally.

I was almost overwhelmed last week by the number of spikers. It’s insane, every day there’s a new opportunity to profit.

And I’m overseas in Japan right now. When the market opens at 9:30 A.M. Eastern in the U.S. it’s 11:30 P.M. JST (Japan Standard Time) for me.

Luckily I was able to catch up on sleep over the long weekend.

I’m burning the candle at both ends because I CAN’T ignore this price action.

On Friday MicroCloud Hologram Inc. (NASDAQ: HOLO) extended its short squeeze to 6,400%.

HOLO chart multi-day, 15-minute candles Source: StocksToTrade

It’s easily the strongest squeeze of 2024.

But I’m not trying to trade this crazy runner!

Shares were still trading above $40 on February 16. That’s an expensive stock for small-account traders.

It’s more difficult to load up on shares and ride the percent gain. We want to follow new short-squeeze sympathy plays.

I shared one of the main factors to identify a squeeze in yesterday’s post.

There are thousands of stocks that move every day. We only want to focus on the best plays. Make sure you’re watching the right stock.

And watch for the price action to match this framework …

Predictable Price Action

© Millionaire Media, LLC

Nothing is a 100% guarantee in the market.

I say this price action is predictable because it CAN follow a general framework. I discovered this momentum over two decades ago. And the patterns still work today.

The most volatile stocks in the market can follow simple patterns because people are predictable during times of high stress.

Like a short seller panicking to get out of a stock before it surges to new highs …

If we can identify key price action, we can build positions around the best setups.

To find these spikes, this is what I look for:

After I find the runner …

This is the framework that I follow to trade it.

Remember: I’m not trying to trade HOLO anymore. Instead I’m more focused on low-priced sympathy plays.

The Next Opportunity

© Millionaire Media, LLC

When we see BIG runners in the market like HOLO, there are often sympathy plays that try to capitalize off the market hype.

One example is Gaxos.ai Inc. (NASDAQ: GXAI).

It spiked on Friday after the company announced some wimpy AI news. And while HOLO was moving toward the breakout level …

StocksToTrade Breaking News alerted the GXAI opportunity at 8:32 A.M. Eastern. This tool alerts the hottest market news before the stock goes vertical.

I entered a few minutes later.

Now is the time to hit the gas pedal!

This 2024 market is intense. Last week our low-priced niche showed A LOT of bullish momentum and HUGE profit opportunities.

I expect a lot of the same volatility this week … Make sure to put in the work!

Cheers.

How much has this post helped you?

(0 votes, average: 0 out of 5)
Leave a reply
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

* 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”