Category: Sykes-type Shorts

Watch list for July 31 & daily recap

Sorry this won’t be the most organized or prettiest post: I’ve got house-guests coming tomorrow and need to clean up! First up, review of today’s trades.

INO – Arggh!!!!!!

It was shortable at Sogo. It was shortable at Sogo. Arrgh. I really should’ve shorted this, even after the 15% gap down. But no, I was too busy losing money on this next stock:

OHB – TimAlert trade

Readers of my twitter feed know I got back in that this morning. I should never have even gotten in considering it held up pretty well yesterday and closed green. My entry sucked ($2.87) and I made the mistake of not covering when Tim Sykes covered. If you trade illiquid stocks and you know a bunch of people are going to buy / cover, it pays to buy before they do. So that was two mistakes. My third mistake was tripling my original position on the spike caused by Sykes’ followers covering but getting bad fills. If I could have gotten filled at $3.50 or even $3.40 that would’ve been okay. Instead I got filled at $3.17 and $3.30. I later covered when it spiked back to $3.50; that was the only thing I did right in this trade. Total damage: -$1552. Annoying, but for someone with a big account like me, not huge. The loss didn’t even wipe out all of this week’s profits.

GGC

I saw this alerted in the IU stock chat. But, because I am horrible at buying breakouts, I did not buy at $8 or $9, I bought at $13. I scalped it twice quickly with 200 shares each time and made a respectable $121.34. Things I did right: kept my position small and actually tried buying a breakout that has run well previously.

DDRX – TimAlert Trade

TimAlert comes out: “Bought 300 DDRX On Probable Breakout At $24.83” I of course bought quickly, partly to get a few cents from slow TimAlert subscribers. Below are my actual trades copied from IB.

+ BOT 961 DDRX false Stock (SCM) 24.905 USD ARCA 14:44:04 4.80
+ BOT 6,000 DDRX false Stock (SCM) 24.950 USD SMART 14:44:07 30.00
+ SLD 5,468 DDRX false Stock (SCM) 25.033 USD ARCA 14:47:20 27.34
+ SLD 893 DDRX false Stock (SCM) 25.000 USD BATS 14:48:20 4.46
+ SLD 200 DDRX false Stock (SCM) 25.110 USD ISLAND 14:48:41 1.00

I held onto 400 shares long because I agreed with Tim’s thesis.

TimAlert comes out: “Sold 300 DDRX at $24.98, Looks Toppy”

+ SLD 400 DDRX false Stock (SCM) 24.958 USD ARCA 15:32:39 2.00
+ SLD 500 DDRX false Stock (SCM) 24.802 USD ARCA 15:34:45 BookTrader 2.50

I quickly sold (learning my lesson from OHB this morning) and went short a tiny bit. Holy crap that thing tanked quick.

+ BOT 500 DDRX false Stock (SCM) 24.680 USD ISLAND 15:35:01 BookTrader 2.50

Wait, it tanked over $2 and I covered my short for a lousy 14 cents??!!? Oyvey. I’m not gonna cry about this though. It is a garden variety mistake and the tank was not caused purely by Tim Alert subscribers; there was some big stop loss sellers. As it fell more I was incredulous that it would fall so quickly. I thought to play for a bounce but did not want to get burned.  So I placed a low-ball bid. Most of my 1000 share order was filled.

+ BOT 900 DDRX false Stock (SCM) 22.662 USD BATS 15:38:29 4.50

The bounce looked weak so I decided to take profits around $23

+ SLD 900 DDRX false Stock (SCM) 22.977 USD ARCA 15:46:31 4.50

Overall on DDRX, +$838.98 today. It helped to make up for my horrid $1552 loss on OHB. Some halfway decent trading on that and GGC helped keep this day from really sucking.

Watchlist

The only thing really interesting on my watchlist is GGC. They had financing news that looks like it will keep them out of bankruptcy. This is a low-volume stock; it was up 112% today on only 2.6 million shares. Back in March the stock was up 200% in one day, and the following day the stock went from $32 to a high of $50 and then closed at $42. Oh, and this company is heavily shorted. So I think this may be a great buy tomorrow. We’ll see if I actually play it. I would wait to see how it looks in the few minutes after the open before buying.

Wait — this was supposed to be a hurried post. Oops.

Disclosure: No positions. I am a customer of Tim Sykes and InvestorsUnderground and an affiliate of both of them. I have a disclosure policy that gives details on those relationships.

Watchlist for July 30 and Today's Recap

ELRN on watch for long, had some good drug news (though not huge). ELRN might be a good buy on early morning strength, particularly on the cross of $7. It was nice today when it hit $7 and popped above $8. On second thought, ELRN probably will not be a buy, considering that it faded gradually all day today after its morning spike.

INO is on watch, I am not bullish or bearish, but considering its huge move today and strong close, it will likely move a lot tomorrow.

OHB remains on short watch. Today I shorted OHB following a certain famous trader’s alert service. I had been watching it all day but missed the entry at $3; my average price ended up being $2.86 on 3,000 shares. I covered at the end of the day for a $390 loss when the stock popped back green. As Yngvai noted on the Tim Alerts blog, I should not have been so concerned about that little spike because small spikes into the close are not necessarily meaningful with illiquid stocks.

I made a couple mistakes: I got in a little too large (a habit I seem to have*) and then my mental stop was too tight. With an illiquid stock like OHB it is smarter to have a looser stop, especially considering how much downside remains.

*I remember I took a multi-thousand-dollar loss last September when shorting WRSP. I had had a huge winning streak and got cocky; my position was something like 5% of the daily volume; I drove the stock up 10% by myself while trying to cover during a short squeeze. I took little comfort from the fact that one month later the company was bankrupt and the stock worthless.

Disclosure: No positions. I am a customer of Tim Sykes and an affiliate of his. I have a disclosure policy that gives details on those relationships.

Followup on Cannabis Science (CBIS)

Trading penny stocks is easy. My call on CBIS was dead on: on green/red action yesterday it fell straight from 1.13 to .83. Take a look at its chart:

cbis

My call on CERS was good too:

cers

Unfortunately CERS gapped down at the open yesterday and there were no shares of CBIS to short that I could find.

How did I predict what would happen to CERS and CBIS? I have carefully studied similar stocks and chart patterns and I must say I learned from the best trader of these stocks, Tim Sykes. If you want to learn I suggest buying his disclosure policy that gives details on those relationships.

Watchlist for July 29

Not too much here. In this market it has been a lot easier to buy than to short, and I am a specialist in short selling.

ohb

OHB is a prime short as a Supernova with no news. I know this company from a fundamental perspective and they will be bankrupt within a year. Volume is very low and shares are not easy to borrow. IB had none today, SogoTrade had some.

china

I am short 3,000 shares of CHINA overnight, following a certain trader who shall remain nameless (although I would have thought of shorting anyway as it was a great afternoon fade and there is still plenty of room for this to fall tomorrow). This is a classic play to short, up only on hype-filled press releases since $1.50. Unfortunately the price action has been choppy. I will look to cover right after the open tomorrow and I will hope for a morning panic.

Disclosure: Short CHINA and I will likely cover the position early on 7/29/09. I have a disclosure policy.