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Posted 4 months, 25 days ago.

Two PennyStocking Plays Setting Up For Pattern Perfection

Tags: Good Trades, Patterns To Buy, Patterns To Short

TIM $15,585, Up $205 No Overnight Positions

Days like today remind me why I’m completely in love with this game. Why this game is ideal for smaller investors, traders, newbies and veterans alike. Basically anybody with less than $50,000 in their account. Or $100,000. Or for those smart people a few million. Why I’ve never needed a fancy office and have always just worked from my bedroom and living room. Why all you need is an internet connection. And a decent broker, like Thinkorswim. Why you can do this in your spare time, outside your job, school or any kind of time consuming habit. Why you shouldn’t manage your money like a diversified mutual fund. Especially when you have so little.

Why I don’t have to be polite. Ever. Why I can say whatever the hell I want. Why I’m gonna get advertisers by the hundreds—like Wall Street Survivor—and you’re gonna have to train yourself to ignore the right hand side of my website. Not that you’re gonna be able to do that. Why my upcoming talks at the University of Minnesota, University of Buffalo and Boston College are all gonna rock. Why everything else in finance, particularly sissy (I mean value) investing, bores me to death. And it should bore you too. Why my book and DVD and future products are going to teach you the rules, risks and rewards of this great game and make some of you millionaire and me a millionaire many times over. Why nearly every day my website breaks another traffic record. Why I just sold another DVD as I’m typing this. Why out of the few hundred I’ve sold, there’s only been 2 returns. Why, unlike other financial authors, I don’t try to hide my DVD, considering it just another income stream, taken advantage of only by the biggest suckers. Why I might even more proud of my DVD than I am my book. Why I’m gonna get people to check it out until my dying day. Why I can be cocky as hell and it doesn’t matter because you’re gonna checking in every now and then whether you want to or not. Because it’s not BullShip. Because it’s unbelievable. And affordable. And exciting.

That one thing that I’ve devoted the last decade of my life to, the thing that’s made me wealthy. At least for a young guy. Even though I’ve barely scratched the surface. Even though I’m not that smart. Even though I’m not that great a trader. Even though 90% of traders lose. That one thing that’s gonna shock the world. That doesn’t care about whether it’s a bull or bear market. That doesn’t care about economic conditions. That doesn’t try to value a company’s worth based on lying management and massaged financial statements. That doesn’t involve you trusting anybody. That doesn’t rely on staying up to date with the latest news.

That one thing that’s gonna put all other “stock market formulas” to shame. Especially those that actually say in their disclaimer they’ve been compensated by the companies they recommend. Because I’m not getting compensated by companies. Because I think these companies are crap. Because I think there’s a ton of illegal stuff going on that I don’t want to know about. Because I focus strictly on the charts. Because the charts make this game so easy to learn. I don’t have to package it. I don’t have to market it. I don’t have to understand it fully. I don’t even have to be very good at it.

Oh yes, PennyStocking is on.

Sure, there were a few low priced stocks moving: VIV, which I just featured over the weekend was up 5%, some little China plays CHNR and TYM were up a bit, ultra-low marketcapper CTIB continued its steady march upwards, but clearly, there were two main micro momos, COIN and SHZ. I’ve covered both extensively (just click the tag and see), but only now are their charts setting up for predictable moves (extreme price moves + fickle day traders = predictable patterns).

COIN is tough because it’s a crap company with a strong chart. And today they were up due to some newsletter, aka fluff. Anyone can scalp this for 25 cents-50 cents, but that’s no fun and since I’m already pushing my trading limits, I must be precise in my entries and exits. I think it’s gonna have a tough time clearing the all-time high just over $14 but if it breaks that level, that’s when shorts stop adding and start covering, that’s when a quick run to $15, $16 or even $17 is possible.

Sure, even if it can’t breakout, the $1 difference between $13 and $14 would still be a nice profit, but if the volume is there tomorrow, I can easily hop on, no reason to hold overnight. The company has shady PR people, so they now how to squeeze the shorts, who wants to bet they’ll come out with some PR this week for that specific purpose? Ideal trade for newbies would be to buy on a clean breakout on strong volume—think 5million+, everything else is just small moves that can easily reverse.

coin

Easier PennyStocking play is SHZ. On Saturday, I warned about intraday $2+ spikes
and that came true within the first hour today and that’s why I shorted 500 shares at $9.47. At first, I had my order at $8.74, then $8.99, then $9.24 (all strategically before the quarter points where there are usually big blocks), but I kept moving it up because I hate shorting into spikes—again, they can go further then you expect. $9.47 was a pretty good entry, $9.74 would’ve been ideal, but it basically surged there from $9 within 2 minutes, so it was tough to be perfect.

When some big sell orders came in, it tried to hold $9 for a few minutes, but failed and I decided to take my $250, covering at an $8.95 average. Within a few more minutes, it test support at $8.50, so I got out too soon, but since it was a morning spike, I didn’t want to take any chances. Proven right about 10 minutes later when the stock retested highs around $9.60.

Afternoon session was different, less volume, gradually downtrending priced, I re-shorted 400 shares at $8.50 when I thought the price would totally collapse—remember it’s up from $4 the other on no news, so this was possible, but not probable—but instead it bounced back to the $9 range (on just a few thousand shares) and I cursed my lack of discipline. (Ideally, I should only short when it goes negative on the day—that’s when I’d feel comfortable holding for $1-2/share gains.) But I had the trend on my side so when the ask came down, I covered at $8.59, still finishing up $205 on the day.

shz

Ridiculous price spreads! Stock finished strongly at $9, so I’m hoping for a morning spike tomorrow to double digits, at which point I’ll short some, but again, I prefer afternoon fades, so I’m basically gonna be all over this bitch all day. Ideal trade for newbies would be to short into a ridiculous spike—tell yourself, you won’t trade it, you won’t trade it and when you can’t take it any longer, that’s when you short—or an afternoon fade. Whether it spikes and drops quickly or fades gradually, this thing could tank $2-$3 within an hour if the variables are aligned.

Yeah, stop playing video games, this is the real game!

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66 Responses

Pages: [1] 2 » Show All

1ETQT

February 25th, 2008 at 9:50 pm

glad TOS now recognizes SHZ… I will be on it tomorrow as well
2sonid

February 25th, 2008 at 10:15 pm

made first trade since watching the DVD this past weekend for a nice profit! Thanks Tim. Watched SHZ for the breakout this morning hopped on for the ride and made a quick 15%. The DVD helped a lot.
What I did right was wait for the price action to determine my trade. What I did wrong, sold too quickly could have made close 30% but shoulda coulda woulda ……Thanks TIM. Pennystocking is the shizzzz
3sonid

February 25th, 2008 at 10:31 pm

one other thing about SHZ. I hope It collapses and we can profit from it. No position yet but have a feeling this thing could see 12 if it gets over 10 tomorrow. What do you think Tim? Stay discipline and wait for it! haha
4timsykes

February 25th, 2008 at 10:34 pm

yah not even sure tomorrow is the top…very scary to short chinese plays, especially on the AMEx, especially with that kind of spread…could easily squeeze short to 15-20, al though its not likely
5Jason

February 26th, 2008 at 12:56 am

Just saw that you have a facebook Fan Club! I’m In!
http://www.facebook.com/pages/.....8835114131
6lmsmith

February 26th, 2008 at 8:40 am

I finally upgraded to a margin account- Now Tim I can short like the big boys :) lets make this money
7timsykes

February 26th, 2008 at 9:44 am

short 300 COIN at $13.50, don’t think this has enough volume to get over $14, but i’ll cut my losses quickly
8Funterpwave

February 26th, 2008 at 9:51 am

First attempt at 14 failed but something tells me it might be back later today…. Short as well.
9lmsmith

February 26th, 2008 at 9:51 am

Coin is a risky short— och Tim- I think it’s easier to buy in the close and wait for that morning spike
10Stan

February 26th, 2008 at 9:53 am

im with u on that 200 @ 13.63
11timsykes

February 26th, 2008 at 9:55 am

yes it is a risky short. def not something u get into unless u can risk some pain
12Stan

February 26th, 2008 at 9:57 am

also im willing to wait till the end of the day but i dont think it can reach its highs today anymore.
13tsa

February 26th, 2008 at 9:58 am

I am also short COIN at $13.75
14tsa

February 26th, 2008 at 10:02 am

I took my profit with COIN at $13.50, I am waiting for another spike to short again
15Al

February 26th, 2008 at 10:06 am

What’s the story with TD Ameritrade, they never have shares to short. Tried shorting COIN today but as usual the message read - Shares of this security are currently not available to short sell.
16timsykes

February 26th, 2008 at 10:09 am

out of COIN 13.85, not risking a breakout, too many pumpers, too many shorts
17lmsmith

February 26th, 2008 at 10:09 am

I am not a fan of pain……… It looks like it’s going to hit 14…….. SHZ was a better short
18be-the-ball

February 26th, 2008 at 10:09 am

tim,

wtf, you say you want to be a teacher etc. but you are just as inconsistent as Cramer, you spent all day yesterday blasting people for considering a short in COIN, then first thing this AM you short COIN. Seriously, TIM, if you want to truly be a breakout star in this field, you need to do better than that. I am disappointed. Do you still offer money back gte on the DVD I bought?
19timsykes

February 26th, 2008 at 10:12 am

BTB, not inconcistent as cramer, just undisciplined. u fololw the DVD and u’ll do fine, i need to rewatch it myself.
20timsykes

February 26th, 2008 at 10:12 am

and there’s a 60-day money back guarantee, minus a restocking fee, if u want.
21timsykes

February 26th, 2008 at 10:14 am

and notice how i said i’d cut my losses quickly. boo hoo a $100 loss, doesnt hurt that bad. if it had failed, since it was a small position, i’d hold it and the upside was $300-$500. poor trade in terms of shorting into a strong stock, but risk reward wasnt that bad
22Stan

February 26th, 2008 at 10:29 am

im shorting SHZ also so thats good, ill wait to see something happen to COIN by the end of the day, but now not expecting anything under 13.50, unless im lucky
23S Adams

February 26th, 2008 at 10:38 am

SEED is hitting highs, so is GRO
24timsykes

February 26th, 2008 at 10:54 am

i dunno about staying short COIN, it’s now a confirmed breakout…since its such a POS, shorts have been adding and adding, probly gonna get squeezed soon, reminds me of CAFE
25Webster

February 26th, 2008 at 10:58 am

Tim,

When do you have an idea when a stock like COIN will stall and time to short?
26timsykes

February 26th, 2008 at 11:02 am

no idea when COIN will stop, thought it’d be a double top, obviously proven wrong now. hopefully we can get a supernova where it just keep going up a little at a time leading up to an explosion day
27Joey

February 26th, 2008 at 11:07 am

Tim, what about SHZ? I saw it fall and shorted at 8.00$.. instead of waiting for a spike like you told :/
Would you hold a few more days (come on this way like 4$) or sell with the loss/move on?
28Stan

February 26th, 2008 at 11:29 am

does low volume on SHZ indicate that SHZ is still good to short? not a break out anymore?
29Rico

February 26th, 2008 at 11:31 am

YTEC - Tim, looks like a nice cup/handle to new all time highs is in the works. Thoughts.
30Joseph

February 26th, 2008 at 11:36 am

Hey Tim, did you lose money when you first started?
31timsykes

February 26th, 2008 at 11:46 am

SHZ i’m gonna look to short before the close if it remains weak. still a chance of an intraday spike, especially since its such low volume. shorting at 8, thats tough, not even sure the run is over, depends on your ability to deal with pain and your tie horizon. 3 months from now you’ll probly be fine, but its not definite and this kind of crap can run to 20, although the odds are against that too
32timsykes

February 26th, 2008 at 11:47 am

when i first started, i lost sometimes but it was 1999 so it was pretty easy. i detail it all in my book
33Funterpwave

February 26th, 2008 at 11:52 am

COIN no longer moving, even though market is moving up fast
34John

February 26th, 2008 at 12:00 pm

Hey Tim,

There are alot of haters and screamers saying alot of crap about you, but thats…crap. Your the only person out there who gives a transparent view on the market. I’m still in university and your the only person that makes tips, strategies, and no bull crap, unlike bloomberg and cnbc with analysts pumping up stocks, etc and providing non=factual information.

Didnt purchase your dvd, going too, wondering what you think of the current market conditions, im in apple and rimm. I’ve been using puts and calls off of apple and rimm, and I never had so much stress in my life concerning the spreads between jan2010 spreads. - day trading calls\puts off apple and rimm,

The only reason im using them is for massive leverage, which is working, cause I cant trade these stocks with the money i have, so the options make it more powerful.

What do you think of the futures and options markets? Should I stick to stocks and options?
35timsykes

February 26th, 2008 at 12:03 pm

thanks for the compliment but i hate leverage and AAPL and RIMM. too many variables, too many big time players, all unpredictable. all charts broken, no edge whatsoever.

never traded an option or future in my life, again, i like what i know, penny stocks!
36Aegir

February 26th, 2008 at 12:10 pm

COINZ just keeps going & going.
37the barber

February 26th, 2008 at 12:20 pm

Hey Tim do u think coin could possibly be forming a double top? I saw a lot of chart patterns that have the exact same pattern as coin here, then tanked… what do u think??
38manhack

February 26th, 2008 at 12:33 pm

maybe better to wait till it tanks or breaks out.
39Ivan Mutaftchiev

February 26th, 2008 at 12:34 pm

Tim,
Coin looks like your favorite patern - after several up days, now it’s moving horizontally on very dried up volume…

what do you think ?
40timsykes

February 26th, 2008 at 12:34 pm

COIN could be double topping but the odds arent as high as i would like since its holding right around all-time highs. still gotta be long biased, which i suck at so i’m avoiding
41Aegir

February 26th, 2008 at 12:41 pm

I mean with this gain, it must go down someday, it can’t go up forever like it has been doing, well what do I know?
42timsykes

February 26th, 2008 at 12:43 pm

COIN is a good pattern, but with this confirmed breakout, its not even close to going down. sure news, collapse could happen at anytime, but the sideways action is bullish because its holding its gain. i short when sideways action when its down slightly cracks, right now the odds favor a bigtime breakout, but i’m not buying cuz i’ve got to conserve my day trades
43timsykes

February 26th, 2008 at 12:44 pm

and also “its got to go down sometime” is what all the shorts who are getting squeezed are thinking, if it goes up a lot, they’ll cover, pushing it up even ore and creating a real spike
44Al

February 26th, 2008 at 12:46 pm

Just shorted GRO at $9.40
45the barber

February 26th, 2008 at 1:03 pm

I personally think its crazy to buy coin or coinz… this afternoon will say a lot about my double top theory… if its looking weeking into the close its a great short.. good luck finding shares though.. every day trader and their brother is shorting this thing
46Stan

February 26th, 2008 at 1:06 pm

it doesnt help for shorting that the market is up overall on the day
47timsykes

February 26th, 2008 at 1:06 pm

Thinkorswim has plenty of shares to short of SHZ and COIN, just no COINW or COINZ
48Funterpwave

February 26th, 2008 at 1:18 pm

Please adjust your seats back into the upright position and fasten your seatbelts. We are now starting our descent. The weather in $12 is sunny and dry. We hope to see you all again soon.

Just wishing really….
49Stan

February 26th, 2008 at 1:20 pm

coin is having a nice spike down now…
50ETQT

February 26th, 2008 at 1:21 pm

Ok I must ask…
I mistakenly went long on SHZ @ 9.10
do you see any hope for another spike or should i accept my loss at this price…8.50