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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Hey Everyone,
As many of you already know I grew up in a middle class family and didn't have many luxuries. But through trading I was able to change my circumstances --not just for me -- but for my parents as well. I now want to help you and thousands of other people from all around the world achieve similar results!
Which is why I've launched my Trading Challenge. I’m extremely determined to create a millionaire trader out of one my students and hopefully it will be you.
So when you get a chance make sure you check it out.
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