When you trade the type of stocks I do, it’s not uncommon to see a stock rip 100% or more in a single day.
It usually happens at least once a week, and when the market is rocking, it happens a few times a day.
Right now, OTCs are pretty dead.
However, there’s a lot of action in listed stocks, primarily due to the January effect…beaten up names like APPH, FUBO, BBBY, and PRTY have all caught a bid.
Today, I want to talk to you about a 100% mover from yesterday’s session. I didn’t take the trade, but it serves up plenty of good lessons that I believe can help you navigate the current market environment.
The Monster Move In Celyad Oncology SA (NASDAQ: CYAD) Explained
The first reason it caught my eye … at 4 A.M. it spiked +280%.
If a stock can spike that high in premarket, there’s usually more juice in the tank.
Plus, it’s a cell therapy biotech play. Biotechs are notorious spikers. Especially if they’re related to something serious like cell therapy and cancer.
Here’s a chart of the whole move…
There were multiple opportunities to enter this play …
First when it double-bottomed at $1.20, second when it pulled back after a spike past the open price, and third when it consolidated before the final push of the morning …
Anyone who bought at the first opportunity had the chance to profit +100% …
When there’s that much volatility, the stress level is off the charts for traders that aren’t disciplined …
That’s when they panic and get predictable.
And that’s when I profit.
In order to find volatility like this, I scan for very specific stocks.
They need to have …
- A price below $5
- Recent news/catalyst for movement
- High volume (at least 1 million shares traded on the day)
- Proven volatility on the day (the price has spiked at least 20%)
- A history of spiking
After that, it’s all about the wait …
Stake Out
These tickers move up and down all day long.
If you buy in at the wrong time, you could subject yourself to the same market-induced stress you’ve been trying to trade.
That’s where the patterns come into play.
We wait until the chart matches a popular pattern, we buy safely above support, and we ride the momentum to profits or a small loss.
I say a small loss because any trade can fail.
It’s all part of staying disciplined. If a trade starts to turn sour, I always cut the loss.
It’s easy to get back in later for another trade. And I definitely don’t want to get stuck holding the bag.
This is my favorite pattern at the moment …
And remember, these trades are quick.
The goal is to be in and out for a cool 10 – 20% profit in a few minutes.
After the trade, I sit safely in cash and wait for the next one.
It takes a bit of time to get the hang of. But anything worth having never comes easy.
Mark Croock knows that better than anyone. He’s one of my millionaire students.
After a few years, he’s managed over $3 million in profits.
And tonight at 8 PM ET we’re sitting down to discuss his most recent strategy LIVE.
Don’t miss this event!
— Tim
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