Not many plays were looking appealing this morning, but QMNM had a nice run the previous day on good volume. Since it had the makings of a STEPS pattern, I thought I would jump in if it was up premarket and started green.
Sure enough, it was up premarket, and started off green. It was under 4 cents so I put in an order for 150,000 shares at a 4 cent limit. However, the price went past 4 cents and my order never executed. That was a blessing in disguise, because QMNM didn't hold above 4 cents and ended up red on the day.
Whew! I'm glad my order didn't execute! If I had gotten in at 4 cents and gotten back out at 4 cents before it went red, I would've had a $100 loss just on commissions. The loss would've been a lot steeper if I got out under 4 cents.
I was planning on taking the rest of the day off of trading because nothing looked good. However, I did have SLAT on my watchlist. It was hovering around $2.53 around 10 - 11 AM PST and had the makings of a breakout. I figured I would come back and check it before the close to see if the breakout would hold and if the volume was good.
Sure enough, about 15 minutes before the close, SLAT was holding its price level and the volume was at an all-time high. So I bought 1200 shares at $2.53 which I'm currently holding.
From a technical aspect, SLAT is looking like an awesome chart pattern. First, it broke out to an all-time high price on all-time high volume. Second, it broke out of a head-and-shoulders pattern. Third, the MACD looks ready to cross over. Fourth, the upper bollinger band is piercing the white candle, with an RSI(2) of more than 90, which is a strongly bullish signal.
The one risky aspect of playing SLAT is that it's a total spammer. In fact, here's a recent ad in the USA Today regarding SLAT.
These spammers can sometimes dump without warning, which is why Tim Sykes likes to short them. For example, BSHF was a spammer and look what happened to it in May as well as just a few days ago.
SLAT may do something similar in the future, but probably not now...these things usually don't dump until they've increased by pretty large amounts.
So essentially my account is the same as it was yesterday, other than about $10 lighter because of the commission I payed to buy SLAT.
See you in the gutter tomorrow.
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15 comments:
Nice on SLAT.
I too hopped on a pumper MODG.
Also this chart has that "manipulated" look beginning to form.
TSTR down another 8% and the awesome TRX another 11%.
love ya Beacon
Hope they can work their magic with PGSI, i'll be reserving shares in case.
Yeah, MODG came up today in my Stockfetcher scans.
I made a scan last month that scans for the candle piercing UBB's and RSI2's after reading your blog. It's a great scan for finding some of those bullish stocks.
PGSI...just looked at the chart...big volume yesterday, hardly any volume today.
Gotta love those Beacon pumps for short opportunities
Yng,
You seem to buy at the close quite a bit to hold overnight. How's that working out for you? Any comments, tips, gotcha's, etc? My largest gain so far has been doing the same, but, I haven't done it often. I guess I'm trying to get comfortable doing it...
Hey, dude, I've been successful with it when it comes to buying breakouts into the close. Many good breakouts will gap up the next day. However, I've grown pretty picky about what breakouts I'll buy into the close. The chart needs to be an uptrending chart, such as the 50 day sma is increasing, and the 200 day sma is flat or increasing. The breakout needs to be on good volume, and there shouldn't be any nearby resistance.
Also, buying a breakout into the close is important for conserving day-trades. To avoid violating the PDT, I save my day-trades for 13th's prehits, or buying an early morning breakout or morning/afternoon short. If I'm out of day-trades, then I have to stick with buying breakouts or shorting breakdowns into the close until I have my day-trades back.
My thoughts exactly re: PDT. Basically PURE right now would be an example of something you'd have played into the close?
I've been unmasked :P
I guess by your definition (50 & 200 day sma), you wouldn't. Though I think it's still looking good. We'll see shortly...
No, I wouldn't buy PURE into the close. It's a spike in a downtrending chart. Too much of a chance of a next-day selloff.
It's always better to trade with the trend than against it. Buying breakouts on uptrending charts has a much higher probability of success.
& I was wrong. Shoulda' took the $.10 gain, but small loss, live to fight another...
Care to expound on the reasoning behind the 50 & 200 sma? As this is what was missing w/ PURE, I think I can learn something here...
(Hindsight is always 20/20, but, my buy-in woulda' been much safer @ 3:30, not 3:50 after the run-up)
I was typing same time as you, you've pretty much answered my question.
Thanks
1 more question before I stop pestering & shut up about PURE:
When I noticed this right before the close last night, should I have been looking at this as a next morning short or just ignore & move on? Or phrased another way, is a full day spike in an otherwise downtrending chart a strong enough indicator to short the following day?
I know the answer already... Gotta' wait till the trend reveals itself. Bear with me, I'm starting to get it. I'm really not too quick here :)
Shorting a large spike in a downtrending chart can be a high probability trade, if the spike is large enough. I probably wouldn't have shorted PURE myself as I don't think there was enough downside to it. If it had a 2-3 day runup, and was up maybe 50% or more, then I would've shorted it.
posted this about PURE on Tims before open:
PURE..The 2 words in the pr Brazil and Disinfectant makes me think short soon.
Yeah, PURE is a total red floater right now, with the red candle sitting outside the UBB. This is on my potential short list for Monday.
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