Short Selling Games: How To & Not To Short A Morning Spike

Posted by timothysykes on Wed 25th of Jun, 2008 12:41:30 PM

Tags:

Each of the past two mornings, I’ve shorted Uranium Resources, Inc. (URRE)—mainly cuz it’s up so much and its horrendous long-term chart and level 2 price action tells me there’s a ton of bitter shareholders looking to sell on these bounces. This 100% stock price spike naturally has brought in the short sellers, many of whom are complete morons, thinking it’s gonna collapse at any moment and I gotta thank God for their existence cuz their premature entry and inevitable squeezing is what causes these morning spikes.

Yesterday, I wisely waited for a nice wall of sellers to enter—meaning there was plenty of overhead resistance, even during the spike, shorting 1,500 at $4.05—even though it was off the day high by 20 cents…I wanted 30 cents of downside and got some of it, but when buyers seemed determined in the $3.85 range, I said to my self “can’t be greedy, this isn’t an I deal play” (it wasn’t negative on the day nor the afternoon). Covering at $3.90 it was a decent $200 gain.

Today, I got greedy. Wanting to make $150 so I could get to $20,000 before quarter’s end—classic amateur psychology and not waiting for a wall of sellers—I shorted 1,500 shares again at $4.40, thinking that this morning squeeze would surely collapse. Immediately and as I wrote in the email I sent out to TIMalert subscribers, I knew my entry was sh#@…friggin greed man, friggin greed! But in the grand scale of this stock’s price action, it wasn’t that bad…

Just a few minutes later at $4.60, I thought about taking the loss, but rationalized this was just a morning squeeze and right then–thankfully–the wall of sellers came in (ideally TIMalert subscribers got in here at 4.50-4.60) and the price gradually retracted to the $4.35-$4.40 range…but no more…I gave it another 20 minutes—an eternity in a non-ideal play—but when it showed signs of bototming, I got out around $4.39, $4.40, a loss of $2, yes two dollars.

Stock lasted another 5 minutes in that range, but the sellers were too many so it crashed down to the $4.15 range where, other than one bounce attempt, its stayed and it only gotten weaker, now negative on the day at $3.85 (just cracked massive 2-day support at $3.90)(1PM lunch meeting is gonna ill my chances at catching a probable further afternoon fade…part-time trading is a bitch!)

Funny thing is even though I played it correctly the first time, it was so quick TIMalert subscribers didn’t profit much…not that there was much profit to be had…especially since sometimes emails take a few minutes (working on a solution to that)…now that my timing was off today, but it was the big tank day, subscribers banked 15%+ over the past 2 hours and had plenty of time to get in…strange how that works, huh?

reversal day Short Selling Games: How To & Not To Short A Morning Spike

reversal intraday Short Selling Games: How To & Not To Short A Morning Spike

Not that it really matters, but the better stocks to short this morning were the speculative oils like Royale Energy, Inc. (ROYL), Tengasco, Inc. (TGC) and Pyramid Oil Company (PDO), all somewhat predictable by Mexco Energy Corporation (MXC)’s breakdown yesterday—no negative Citron report required!

Spread This Post:

TIMstore Monthly DVD Specials:

See all TIM DVD specials HERE

Related Reading

After The Morning Rain Comes The Afternoon Sunshine February 26, 2008
How To Short Sell Penny Stocks Safely: Three Quality Short Trades June 4, 2008
How To Short Sell A Media-Sponsored Pump & Dump April 18, 2008

Rambone

This is reason for NYNY spike today.

Hot Stocks story about NYNY
Empire Resorts and Concord Associates announced that the New York State Legislature has approved Governor David Paterson's program bill granting an enhanced revenue structure to cover expenditures, which will make possible a $1 billion dollar world-class gaming resort destination at the site of the historic Concord Hotel in Sullivan County, N.Y. The project is scheduled to open in 24 months. Demolition of the existing structures will be completed in July, when new construction is slated to begin.

Aegir

What time is best to trade??

sniper6

when your stocks have gone way, way up in value?

Alex

Where are all the superstars? ... Tony Ellis et al.
I'm looking for good breakouts..not seeing much today

Rambone

CTB looks like an intersting short play. 8.80 intraday support. I don't think it can hold its gains on the upgrade today.

Tony Ellis

lol...I'm looking too!

Rambone

LNG getting action now. Quick 15 cent pop at highs of day of 5.10

sniper6

anyone watching EFFC?

balls...or just plain nuts...

VISN looks good today, pretty strong

Alex

Well, if Tony Ellis doesn't see any breakouts then there probably aren't any.

brent

Tony E check out BQI t/a. please give me your opinion.

sniper6

nevermind on EFFC

Alex

VISN looks pretty good - could use more volume though

balls...or just plain nuts...

im going long on VISN 300 @18.55

Rambone

VISN is known to lose all its gains. Look at the 10 day. Can't crack 19.

XFML could be a runner. Triple bottom bottom last 3 days off of 2.20.

SQNM making another nice spike up. Don't even bother shorting this has been a long play since 9.

PDO broke under 34 again. Will test 30 in the morning then bounce off of that number.

Tony Ellis

VISN, ASIA and FEED are dead to me! lol

Tony Ellis

anyone know what's up with JUHL? Just wondering not a recommendation.

Alex

I can only see one day of chart action for JUHL

Tony Ellis

JUHL...reverse merger...CEO on Fox Business this morning. I almost bought @ 1.40

sniper6

WWAT nice pop, better volume than I've seen in a long time, based on meaningless press release. Scalped up for a quick $75 gain today, but buyer beware, it'll fade for sure. I know 'cuz I am still holding a long position and so far have gotten dry humped on it

Alex

lol - CEO on Fox expains it - could be a great short - someone tell Timmay!

sniper6

I believe I will short that fucker WWAT right back down where it came from this morning. Weird, being long and short on the same POS stock.

Alex

Tony - I'm curious as to why you almost bot that at 1.40

Rambone

LDK at 42 is going to get wild. I know this stock and something big is building up. Huge rebound from morning lows.

Tony Ellis

Actually 1.70...I say almost, but not really just thought about it because it traded a lot of shares for an OB and it was a new wind play. Definitely, would not have been a disciplined or high percentage play.

Tony Ellis

IDAE.OB beautifully manipulated chart. Am I right?

Tony Ellis

How did we miss SQNM breakout?

eb

TonyEllis...you going in IDAE?

sniper6

hey Fantom-

how'd you make out in the housing sector? Ended up covering 500 DHI @ 2.65, down from $3.10 avg, $225 profit less my costs, not too bad and it was good for a laugh. I hope I said that quiet enough, don't want Sykes getting all worked up again- no disrespect of course. I hope he had a good lunch @ Plaza

sniper6

ah shit, couldn't find WWAT to short. If anyone else can, grab it with both hands

PCola

WWAT shorts available at IB

Kris

Tony--IDAE has vol. increasing and on an uptrend. I would be afraid to buy and afraid to short-until sign of weakness. What are your thoughts?

sniper6

PCola- thanks! & good luck trading

sniper6

hehehehehe my EGO got bruised today. Nice to see I can laugh at my losses too

lmsmith

SQNM nice afternoon fade....

Tony Ellis

Kris...IDAE looks manipulated to me. Two months without a down day? I wouldn't play it either way. These things can keep going up or collapse and I haven't figured out how to predict it.

Kris

ok...thx for your thoughts! i did not want to touch it, unless, hehe, it starts to look weak.

Rambone

Finally some of my scalps are coming through. CTB cover for $.30. My guess was right. Today is a scalp day as no real movers out there that I know of.

MBI only got $.10 from that one. Underpeformed my expectations by $.90.

APWR up $1.20 on that one and covered. $.80 below expecations.

LNG was a $.05 loss. Low volume move on resistance break wasn't strong enough to hold it above 5.

LDK is finally busting through. 43.40 up 1.40 on this one. This stock is taking out day highs now.

Buying URRE here at 4. Uranium plays are not dead. Will sell fast if it goes under 3.90. Cut your losses quick.

sniper6

Wacky action now, energy was in the shitter all day, but where ya gonna turn? Energy, that's where. Reloaded BQI @ $6.05

Alex

lol - IDAE is unreal
SQNM - maybe an afternoon rally?

lmsmith

SQNM I am short @ 16.18--- I believe this will have a pull back....will hold until the end of the week if necessary- or tomorrow may be all it takes.

sniper6

picking on the financials again. Short 100 TCB @ 12.88

Rambone

Out of URRE for a quick $.14 scalp. Love high volume movers. If it's not liquid what's the point.

Forgot about HIRE. Turned out the 17.60 offer was legit as later was released. $2 more than original. Out cost of commissions.

Waiting on LDK as my only open play. Hoping for 48 tomorrow as this was previous resistance from last big spike up 2 weeks ago.

Grabbed some TSO at 21.55. Buy the refiners on the oil drop.

sniper6

who let da bulls out?

Rambone

Short IPI at 67.45.

Fantom

Sniper6

I am truly his stubborn student. I still refuse to cover. The industry owes me money and I shall have it. Their balance sheets are red and in that movie there will be blood!

They will expose it. We shall see the outcome Thursday-Monday! The housing sector is in the gutter, soon it will show.

Rambone

Covered IPI at 65.30 from 67.45 for a quick $2.15 scalp.

Rambone

Sold LDK at 42.85. +$.85. Will revisit it tomorrow.

Sold TSO at a $.20 loss.

I'm done with for the day.

Good luck to you all.

timothysykes

just got back form a great lunch, IDAE, yes, i've covered it...SQNM, yeahhhh told everyone not to short back at 9,10,11...JUHL could be multi day runner...URRE sad that it came back....no more trades for me today

timothysykes

look at COIN breakdown

PCola

Hey Rambone, where's you see taht he offer for HIRE was raised to $17.60? Thanks

Adam

short PDO @ 35.20 out 34.88 was contemplating holding overnight, decided not to. .32/share

timothysykes

new post:

http://www.timothysykes.com/timsykes/2008/06/25...

Rambone

PC,

This is from flyonthewall.

10:14 EDT HIRE theflyonthewall.com: Hireright-HIRE decided to allow third party to conduct due dilligence review
On the evening of June 23, 2008, the third party and its representatives, including its legal and financial advisors, were provided access to an electronic data room and began conducting due diligence on HireRight. :theflyonthewall.com

10:14 EDT HIRE theflyonthewall.com: US Investigators raised offer for Hireright-HIRE to $17.25 on June 13th
:theflyonthewall.com

10:14 EDT HIRE theflyonthewall.com: Hireright-HIRE entered into standstill agreement with third party on June 21st
:theflyonthewall.com

10:14 EDT HIRE theflyonthewall.com: US Investigations offered to match $17 per share offer for Hireright-HIRE
:theflyonthewall.com

10:14 EDT HIRE theflyonthewall.com: Hireright-HIRE says advised US Investigations Services of $17 per share offer
US Investigations Services had offered $15.60 per share for Hireright on June 10th. :theflyonthewall.com

10:14 EDT HIRE theflyonthewall.com: Hireright-HIRE board authorized company to negotiate confidentiality agreement
:theflyonthewall.com

10:14 EDT HIRE theflyonthewall.com: Hireright-HIRE received letter from third party strategic buyer for $17 in cash
:theflyonthewall.com

09:39 EDT HIRE theflyonthewall.com: Hireright-HIRE shares trade up on unconfirmed speculation of higher offer
HIRE, is recently up $2.06 to $17.36.on unconfirmed speculation of a higher offer for the company, a provider of employment and drug screening solutions. HIRE announced on June 10 it agreed to be acquired for $15.60 in cash by Hercules Acquisition Corp. :theflyonthewall

This is the SEC filing released earlies to confirm.
http://secfilings.nasdaq.com/filingFrameset.asp...

Good short at the time as the stock would have came back down to 15.50 without confirmation of higher offer. News came out a few minutes later as did a filing. This happened with Yahoo yesterday. Shot up 3 points on confirmation from high ranking sources that a deal to buyout Yahoo was still on. An hour later turned out rumor was BS. They were referring to the search engine part of the business not the entire business.

blog comments powered by Disqus

Start Here

Who Is Timothy Sykes And Why Should I Care?

See Tim's full bio HERE. Tim turned a few thousand dollars into a few million by taking small gains time after time on hundreds of volatile penny stocks, discovering that his trading strategy, while consistently successful, works best for those with smaller accounts.

Determined to teach others this PennyStocking trading strategy (learn more HERE), he went back to his original $12,415 roots (already $58,000+ even though the stock market has crashed) to show everyone how to turn thousands into millions, even while having a life (somewhat) and making plenty of mistakes. Currently he is the #1 ranked trader out of 25,000+ on Covestor)

How Can I Consistently Make Money In The Stock Market?

Hard work, Determination and Know How.

Hard work to learn how the greatly misunderstood niche of penny stocks provides opportunities every now and then on which you should pounce.

Determination to seek those probable profits out and know how in order to actually profit from them.

Long story short, wait for stocks that are extremely volatile - for whatever reason - and then aim to take small profits (between 10 and 50% within a few hours, days or weeks) here and there, either from betting on higher or lower prices (yes, you can make $ betting on lower prices, it's called Shortstocking (learn more HERE).

Why Penny Stocks?

As Tim explains in several ALL-NEW instructional DVDs (see them HERE) and in over 2000+ blog posts, penny stocks are the most hyped and corrupt niche in the entire investment world. These two qualities make them the easiest to profit from (legally) because the vast majority of people who play penny stocks are suckers and all-around ignorant people. If you have any intelligence whatsoever, you have a clear advantage and it's like playing basketball against mental midgets.

Where Do You Find Stocks To Trade?

This is the #1 FAQ (see more HERE) and it is answered in THIS instructional DVD.

Of course, that's just a brief introduction - to receive a full education, there is Tim's book An American Hedge Fund which is the story of his remarkable rise and lessons learned.

To truly increase your odds at profit, Tim has designed an entire set of detailed instructional DVDs, covering all the variables that amount to over 24 hours of instruction (see them all HERE)!

Join TIM

TIM Trades

View All

Date	Stock	Buy	Sell	Net
Nov 19	AENY	$2.80	$3.02	$1148
Nov 18	NLST	$4.16	$4.40	$947
Nov 18	IMGG	$1.42	$1.64	$2094
Nov 17	NLST	$5.04	$5.59	$2195
Nov 13	VRMLQ	$21.50	$22.97	$2901
Nov 11	EONC	$2.61	$2.80	$687
Nov 10	EONC	$2.74	$3.36	$9784
Nov 6	QXM	$4.31	$4.80	$1936
Nov 4	COT	$8.66	$8.88	$642
Nov 4	QXM	$4.61	$4.89	$822
Oct 30	DDRX	$25.70	$26.53	$812
Oct 29	CTDC	$4.00	$4.42	$781
Oct 26	AWSL	$3.24	$4.10	$2516
Oct 23	RODM	$5.27	$5.23	$301
Oct 22	AMLM	$2.69	$2.97	$820
Oct 22	USEG	$6.12	$6.09	$85
Oct 20	CBOU	$8.93	$9.06	$243
Oct 16	VRMLQ	$16.79	$18.65	$2773
Oct 13	YONG	$11.05	$11.66	$1202
Oct 13	NPHC	$0.59	$0.71	$583
Oct 12	IMGG	$0.60	$0.70	$682
Oct 9	ZAGG	$5.50	$6.10	$2380
Oct 7	GVBP	$0.03	$0.27	$702
Oct 1	NPHC	$0.70	$0.85	$1482

Total: $98,094 (681%)