Why I Bet Against SkyTerra Communications, Inc. (SKYT), Lost & I’d Do It All Again…
Posted by Timothy Sykes on Fri 6th of Feb, 2009 08:20:43 AM
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The following post was sent to TIMalert subscribers mid-day the other day:
Shorted 1000 SKYT at $3.10 so far…actually now 2000 shares total at 2.98 average…still have 2000 more shares i’m trying to short, but i wont chase it since its down 18% on the day already and the
volume is pathetic…great great great chart/setup, just not liquid enough
to be truly perfect…really no support anywhere, i wouldn’t be surprised to
see this back to the low $2s or high $1s in the next few days/weeks…if I
don’t get any more shares short, maybe i’ll just hold longer to capture a
$1,000+ probable profit…this is a gimme chart pattern, as detailed in my
pennystocking part deux dvd, just not truly liquid enough
and then this a few hours later:
Doubled Up on SKYT, Short 4k at $3 even…i like this pattern that much, especially on this failed late day squeeze…sellers moving in, i still expect the low $2s within a few days, as always be careful with these things!
This was the the beautiful chart setup:
…a setup I have shorted time and time again, usually profiting around 10-20%, as detailed again and again in PennyStocking Part Deux DVD, covering within 1-3 days, usually feeling regret when the stocks drop 40-70% over the next few days/weeks, just like DARA did a few months back, PSTI similarly spiked due to paid-for spam, and similarly failing carcass of a company VRML.
…but this is how the chart turned out:
I covered before the big spike–at at $3.30 and $3.50, losing about $1700 in total and yet, I didn’t play it–by my strategy–all that bad.
Sure, I coulda woulda shoulda timed my initial short better–by staying more disciplined, instead o shorting in the morning, thinking I’d miss a big 30, 40, 50% daily drop since the volume dried up so much, I’d shoulda woulda coula waited to short into the market close on the first red day, in the $3.40 area–as some successful PennyStocking DVD students like Reaper and a few others did–I coulda woulda shoulda timed my exit better–the stock did fade to the $2.40-$2.60 area before and $2.80-$3 after the spike to $3.50 at which point I got out, so yes there were a few places to profit (Reaper and a few others each made a few hundred $, justnothing big…on the short side), but the great thing about ideal plays of my strategy is that you don’t have to be perfect in your timing to make some pretty decent $.
Unfortunately, I underestimated just how many shares Harbinger Fund would be buying–oh yes, they decided to fund this carcass of a company, which, I didn’t realize at the time, methinking it was just spam (due to all the spam newsletters that promoted this one).
The good news is that my PennyStocking Part Deux DVD also details how some spikes shouldn’t be shorted, and this turned out to be one of them. If I had any balls, I’d have gone long this stock on the breakout above the spike’s highs of $3.75 and coulda woulda shoulda sold yesterday in the $4.75-$5 area for an easy 25% gain
But I’m not perfect, nor will I ever be. Buying a thinly traded piece of crap company scares me much more than my bread-and-butter shorting so I did the best I could. If I timed my stuff better, worst case I’d have broken even…as it is, I lost a good chunk and am now down 8% off my highs this year.
Does this mean my strategy is dead?
Hardly!
It means I’m not as good as I’ve always said I’m not and that my once-upon-a-time thousands to millions feat and 200% return last year can and should be duplicated by anybody not as good as me. Especially if you learn to go long these Supernovas too!
Patience young hyenas, this was a good learning experience–it’s too bad more of you couldn’t find shares to short–yup, I think I lost the most $ out of everyone–and it’s not over yet as the stock’s pattern still interests me as a short…eventually…when enough stubborn shorts have been brought to their incompetent knees.
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TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| 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: $92,304 (644%)
