How I made $1,600 (20%) by short selling pump & dump XSUNX, Inc (Public, OTC:XSNX)

XSUNX (OTC BB: XSNX) was pumped this morning by StockPreacher (whose pump of ALAN was an awesome short for me months ago) and Beacon Equity (both are owned by the same people). They were paid 900,000 shares by the company to promote it. Timothy Sykes had a good blog post about this pump. You can see the pumper’s disclaimer below. One nice little touch is that Beacon Equity’s disclaimers are images so it is harder to search to see how much they were paid for each pump.

xsnx_disclaimer
(click here for a larger 1-day chart of XSNX).

XSNX
XSNX

As a result of the pump the stock jumped from $0.12 to $0.22 in under 15 minutes. I sold short 35,000 shares at $0.202 at Interactive Brokers just as it started to fade off of its day’s high. The one problem with short selling such a cheap stock is it is not only not marginable, but short selling stocks under $2.50 per share requires $2.50 per share in cash. So short selling this stock required that I use $87,500 in cash. Still, It was a super-easy short with little risk. Except for the first minute, this trade was never in the red. The stock fell quickly with only anemic bounces. Just over one hour later I covered my short position at $0.156 when I got bored and netted $1,612.37 with a profit margin of 22.8%

By the way, it is still not too late to sign up for Tim Sykes’ Las Vegas Seminar on October 18th and 19th. If two more people sign up using my affiliate link in the next couple days then I will go to the seminar too! See my previous post on the seminar for all the great reasons you should go (and a special benefit–a phone consultation with me–for those who sign up using my affiliate link).

I should also point out that I informed my Twitter followers about my intention to short XSNX even before I got filled on my short sale order so any of them with Interactive Brokers could have easily made 20% shorting this pump & dump with me!

Disclosure: No positions. I have a disclosure policy.

Trade recap for August 26th: Scalping Vonage (VG)

I took Vonage  (VG) long and short today, but it was not ideal for a short. I also played a TimAlert. I wait with baited breath until tomorrow. I am back green on the week and I have made up for last week’s losses too. Not a bad day.

Watchlist

WAVE – long on strength, short on weakness.
VG – short aggressively on green/red.

Today’s Profit: $1280.17

Disclosure: No positions. I have a disclosure policy.

How I missed an easy $8,000 on Georgia Gulf Corp. (NYSE:GGC)

GGC an easy short once it went negative on the day. It was quick, but a smart trader would have nailed it for $4 per share in under 20 minutes. Unfortunately, despite anticipating this and having my 2000 share short order ready at SogoElite (which had shares of GGC to short), I completely missed the trade.

See the video:

Short 2100 GGC  @ 31.062 (at SogoElite)
Cover 2100 GGC @ 30.977
+$177.24

Other trades for the day:

SLD    200    WUHN    false    Stock (SCM)    4.00    USD    ISLAND    09:31:17        1.00
SLD    200    WUHN    false    Stock (SCM)    4.00    USD    ISLAND    09:31:22        1.00
SLD    200    WUHN    false    Stock (SCM)    4.00    USD    ISLAND    09:31:29        1.00
BOT    600    WUHN    false    Stock (SCM)    3.84    USD    ISE    11:06:20        3.00
+$90

+    SLD    2,050    SCLN    false    Stock (NMS)    4.200    USD    ARCA    09:39:12        10.25
+    BOT    2,050    SCLN    false    Stock (NMS)    4.170    USD    ARCA    09:40:08        10.25
+$40.50

Short 1300 WUHN @ 3.798 (at SogoElite)
Cover 1300 WUHN @ 3.585
+$277.28

+    SLD    6,000    CHINA    false    Stock (NMS)    2.792    USD    SMART    15:41:25        30.00
+    SLD    6,000    CHINA    false    Stock (NMS)    2.780    USD    SMART    15:41:28        30.00
+    BOT    6,000    CHINA    false    Stock (NMS)    2.763    USD    SMART    15:42:58        30.00
+    BOT    6,000    CHINA    false    Stock (NMS)    2.770    USD    SMART    15:43:30        30.00
+$118.30

Today’s profit: $703.82

Disclosure: No positions. I have a disclosure policy.

Scanning for supernovae

Yes you read that right. The plural of supernova is supernovae. I am obsessive about grammar. By the way, the plural of index is indices, not indexes. Anyway, supernovae are stocks that are up an insane amount, over 100% in a couple days; Tim Sykes originated the term. The supernova du jour is GGC, which I am now looking to short aggressively on the right price action (what do I mean by the right price action? Buy Sykes’ excellent DVD

I am a happy user of Stockfetcher.com. Here is the code I use to scan for supernovae.

show stocks where close gained more than 99 percent over the last 5 days
and price is between .25 and 15
average day range is above 8
and volume is greater than 500000

set{ DayChg1 , close – close 5 days ago }
set{ DayChg2 , DayChg1 / close 5 days ago }
Set{ 5DayPctGain, DayChg2 * 100}
add column 5DayPctGain
and sort column 5 descending
Set{5DaysAgoPrice, close 5 days ago}
and add column 5DaysAgoPrice

Looking for my watchlist? This is it. GGC is the stock I’ll be watching tomorrow. WUHN is also almost a supernova but I couldn’t find shares to short. AIG may be interesting, along with other finance plays, but I don’t like trading finance stocks. CMLS also on watch, more likely a good buy tomorrow than a short. I probably won’t play it.

Disclosure: No positions. I am a customer of Stockfetcher.com, subscribing to their cheapest package. I have no other relationship with them. I have a disclosure policy.