NLST goes supernova

There is no watchlist tonight. That would be superfluous. There is only NLST (okay, IMGG is also interesting, but NLST is much better). Did you follow my advice to ALFSS? I did and I am ready. (And by the way, ALFSS certainly does not mean short it as soon as you can. Supernovae make great longs before they make great shorts and I tried to long it Friday). If you are interested in trading supernovae, watch this video where I lay out my battle plan.

For further edification, see my trade recaps of recent supernova GGC.




Disclosure: No net positions in any stocks mentioned in this post. I have a disclosure policy and you can find all my disclaimers there as well; those disclosure & disclaimers are incorporated by reference into this post.

0 thoughts on “NLST goes supernova”

  1. It is a beautiful chart, I doubt AMTD will have shares but I will keep trying.
    GCHT has a nice chart.
    I have to start trying to buy some of these breakouts, it’s getting to the point that I can’t make excuses any more. I have studied the charts, entry and exit points so much that I don’t know what else I can do to make me feel more comfortable playing these.

  2. EPM has a nice chart and could continue to breakout but being a oil play there might be other influences.
    TSTC had a failed breakout or a gap and crap Friday, there could be more downside, or maybe just sideways action from here but I will watch.

  3. NLST news on Hyper is actually really good Reaper. Chartwise yes it goes supernovae. However, having done my DD, I think there is still much much more upside potential.

    But again if what u need is just short on weakness for 20-50c/share then its a different story.

    1. What makes you qualified to say that? Are you in the industry? Have you tested the product? If it really is that good of news then why didn’t you and other people who know that buy more of the stock Wednesday morning after the news came out? Why did the stock wait two days to run?

      It doesn’t matter how this product does. The run-up is due to hype and momentum traders (as evidenced by when the stock went up) and the stock almost certainly (90% probability IMHO) will drop 50% within the next couple weeks.

    2. yes Im not qualified to say anything about their products but I am a Comp Sci graduates so I know a bit about tech… Kingston has 8gb and NLST just released the 1st 16GB cloud DRAM memory. Dunno how game-changing that is gonna be though

      and reason im not long because I never heard of NLST until friday (being #1gainer). too busy playing NANO breakout. Im thinking to short it too but… afraid got squeezed. And true i agree about momo run-up…

      Reason I posted comment just to get what ur thinking

  4. nice video.

    ALFSS means short reservation? I guess I don’t have much choice with only an IB account below 100k. what are the downsides of going short whenever possible on IB and going long same amt in another account? What I know are dconcerns would be a forced buy-in and the slippage when selling on my hedge account on OTCBB/pks/illiquids. anything else?

    doesn’t look like I can play this one, anyway.

  5. Hey Reaper: I am a graduated Electrical Engineer since 1996, been dealing w/hardware basically almost all my life since I was 14-15 y.o. I am also a Database & Web applications developer since 1999 with a lot of exposure to cloud computing and server virtualization.

    Please excuse my lack of modesty on the previous statement, it goes only to backup why, as I commented on last Friday, consider the announcement to be important news for this (small) company in terms of sales possibilities, technology, etc.

    Now, in terms of stock market movements, you guys definitely know better. I have seen good companies with great products sinking and we all have witnessed scam companies with no products at all going supernovas. I have been trading for only 6 mo now, so there is no way that I’ll pretend I can know better than you and Timothy. If you guys say this a possible short then I’ll be watching all day for those short signals!

    1. Same thing here qbantek… Cloud Computing is next gen and NLST is in that industry. Wanna short but afraid to get squueeezzeddd

  6. I do read your FAQ and I know what the acronym means – just wondering what ALFSS should mean in a functional sense.

  7. I think it is very important to remember that even though you might think you have some experience in the field, there are people that do this for a living; Professionals that dissect this information daily, or hourly. Why would anybody want to challenge someone that does this everyday for a living.
    I would love to compete against people in my business that might try to do this part time, I would make a fortune manipulating people to lower their bids to take the work, then come in and bail them out when they failed to deliver on time.
    If you played football in the park with a group of guys, would you challenge the Colts to a game thinking since they have three injuries you might stand a chance. I have realized that no matter how hard I try I will never be a professional stock trader but I can use my size to my advantage, hopefully that will give me a slight edge over the pro’s because they can’t effectively trade in this nitch.
    Michael has pointed that out several times in some of his writings.
    NLST showing strength again this morning, AMTD has no shares to borrow.
    Michael, if you had to choose between Sogo and TOS, which one would you choose. I know that IB is the first, but which one would be the second.

    1. Sogo would be (and was for me, this year) second. I actually just wired some more money there from IB so I could play this short as big as I want (if I do indeed trade it).

  8. No shares to short in IB…shit, i short a few in 5 when the dance started, i was going to close now and wait til it bounce u to reshorted again up…but i think i am gonna stuck to those shorts as im not sure i could reshort it again up, what do u guys think?

  9. These are hard to play, but PARD might be a good bounce play after it bottoms out. It has bad news this morning and people are dumping their shares.

  10. WTF just happen with CLRH the MM slept for a second? I dont know but i have made a 40% in less than a minute, I had the orders in…an just heard the TWS beeping… I love this game

    1. Sorry, Luis, but that trade will probably be canceled as a trade-through. If your order was executed there at .83 then expect to get a notification in TWS in a half-hour to an hour.

    1. Hey, it happens. I’ve lost $20k in realized profits to Nasdaq canceling trades over the last year. Most of the time I expected it, but a couple times they just screwed me.

  11. Just got off the phone with Sogo after my 10k short of NLST lost me half my account there! So that is what a margin call feels like … doesn’t feel good even though I am perfectly hedged on my 10k NLST short, having gone long against the box last Friday in my IB account to ensure I had a borrow. This has wiped out half my Sogo account and will necessitate a quick wire transfer, but my net loss is only my commissions so far. And I have until the end of the day to close my position at Sogo.

  12. That’s a good play, it’s already fading nicely. I hope you do well with this one. I hope one day I can play with the big boys and get off the sidelines.
    As I type it looks like it’s fixing to tank.

    1. my net position was shorting 4k @ 5.78 … had 10k but covered that immediately; margin call was stressful and knocked me off my rocker. I’ll look to hold my short until I have to cover at EOD. But, you know I have an itchy trigger finger.

  13. Nice trade Reaper … sorry about the margin call.
    My humble opinion is that there is too much expectation for this stock to fall right now.

    “Supercomputing trade-show, taking place in Portland, Oregon during November 17-19, 2009” –> I want to see price action after this event.

    1. I still think you’re wrong … the guy at Sogo said lots of people there had shorted NLST and were getting killed. Once they all get margin calls and cover, a lot of the buying will disappear. Stocks, even on good news, do not go up 500% in three days without dropping substantially afterwards.

  14. Out of HEAT at 11.54 for a 300.00 profit. That was a good trade I think, it does seem to me like luck but I have a good plan. I waited until over 1mil shares traded and for the double top to form, do you think it’s luck Michael or am I trading correctly.
    Only bad thing is I left money on the table, damn down to 11.40 now.

  15. I guess the reason I’m asking is because I have been holding my position sizes down trying to follow your rules and using as close to the same size on every trade as I can. I’m thinking about taking some larger size trades in the near future, I may wait until next year but it will be soon I think. I’m fixing to open an IB account after the first when I know my taxes are going to be ok, then a Sogo account by mid Feb.
    I’ve tried to be as patient as I can with these smaller positions, it’s hard when I know I could have made more money, but of course I could have lost more too.

  16. HEAT is now under 11.00, I missed a lot of profits there. I had no reason to sell either, it never once tried to spike on decent volume.

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