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Triple-Digit Surge: New Market Trend?

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Written by Timothy Sykes
Updated 6/14/2023 5 min read
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Traders are creatures of habit.

The best traders are exceptionally good at spotting trends early.

For example, stay-at-home stocks in 2021 were popping off, energy companies in 2022 were all the rage, and AI-related firms dominated in 2023.

However, the run in AI stocks is probably set to pause soon after the massive rally we’ve witnessed in mega-cap tech stocks.

You see, when the AI trend was just emerging, all a company had to do was mention the word AI in its press release, and the stock had a good chance of ripping higher.

But because the AI trade has gotten heavy…you’ll need more than just the mention of AI to push your stock up.

In fact, yesterday, a little-known software stock exploded by more than 100% intraday.

Why did this “AI stock” take off when most of the market was weak?

It all has to do with something they did last week.

Mixing this catalyst with AI could be the next winning combo.

What Caused This Stock To Explode Yesterday?

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AI has turned investors optimistic about the future. And while we might see a mild recession in the economy, the bulls are running the show on Wall Street.

But just because a company mentions AI in its press release…it doesn’t mean it’s a lock that the stock will rise.

After all, we are several months into the AI hype train.

But that didn’t stop WeTrade Group Inc. (WETG) from blasting off yesterday…shares went from $8.44 (Tuesday’s closing price) to a high of $23.16…

What was the catalyst that set it off?

WeTrade Group Inc. Launched Large-scale Language Processing Models To Increase Product Applications In The Field Of Artificial Intelligence

Pretty basic, right?

I think so…and if that’s the only thing the company had going for it…then I think it wouldn’t have rallied as hard as it did.

However, I believe the press release the company sent out last week made WETG such a hot ticker.

Here’s what the company released on June 8th:

WeTrade Group Inc. (WETG) will affect a one-for-one hundred eighty-five (1-185) reverse split of its Ordinary Share. The reverse stock split will become effective on Friday, June 9, 2023. The CUSIP number will change to 961884202 in conjunction with the reverse split.

Wow…

A 1-185 reverse stock split.

That means for every 185 shares you own, you’ll receive one. The stock price is adjusted so you don’t lose money from the split.

But what it does do…is it reduces the float.

In other words, the reverse stock split dropped the float to somewhere around 400K – 600K shares. The exact number varies depending on the source you use, but regardless, it’s super low.

Size Matters

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You might not have thought much about it if you just read the headline in WETG yesterday.

After all, every company trying to pump their stock price up is coming up with AI press releases.

However, WETG was a juicy play because of the limited supply of shares.

Economics 101 teaches us that if supply is low,…and demand is high…prices must go up.

And that’s exactly what happened in WETG.

Source: StocksToTrade Breaking News

If you had StocksToTrade Breaking News, you would have caught the news headline early…

More Breaking News

And if you were a good student who studies…then you would have been ready to pounce on the trade knowing how limited the supply of shares was.

Bottom Line

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If you want to take your trading to the next level then you have to be constantly curious.

Ask yourself…

  • Why is this stock moving the way it is?
  • Is there a theme or trend in the market that’s working/isn’t working?
  • What are the makeups of good and bad trade in this market?
  • Should I be trading aggressively or passively?

Come up with your own questions…and try to figure things out.

But you don’t have to do it alone.

I am working with my students daily, pointing out where I see the best action and warning them of any dangers I see.

My stock trading mentoring program has helped develop over two dozen millionaire traders.

If you’d like to learn more about it…and see if you’re a fit…THEN CLICK HERE TO GET STARTED. 

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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.
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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”