The Highest Percentage Trade I Know: Short Selling Pump & Dumps aka My Latest Trade In Novogen (NVGN)
Posted by Timothy Sykes on Tue 19th of May, 2009 02:45:00 PM
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This was a winner form the get go, perhaps my most dead on trade (after last week’s most dead on one…yeah i’m hot right now…& for the past 18 months….and for the past decade)…here’s the story:
Of a pump named Novogen,
Who was running a failing company,
There was one big investor, with a blog,
So he pumped the stock.
That was my cheap ripoff of The Brady Bunch song, I know it doesn’t really work…but I can write anything and you will like it because what really matters is my stock analysis and on pump & dumps, I’m usually pretty good.
Take this latest pump on NVGN, this is what I sent around 1m EST to TIMalert subscribers:
NVGN and MSHL are 2 inter-connected piece of crap biotech’s, both up huge for some unknown reason, probly because the whole sector is up huge…NVGN is up from $2 to $6, MSHL is up 40 cents to $1.20, nice 2-day triples…both are potential shorts given their patterns and inevitable return to being the carcasses that they are.
Then the question was reserving shares to short, IB had none, Thinkorswim loaned me 4000 around 8am (I didn’t even wake up at 7am like I should have to guarantee 1st in line for shares to short) (Don’t know what I’m talking about, that’s because you’re lazy and haven’t read THIS post on reserving shares to short) (Yes, your poverty is a consequence of being lazy)
I had a breakfast meeting, but when I got back, I saw NVGN down just a bit on the day, unable to go green, a perfect short entry so then I emailed TIMalert subscribers:
Shorted 4000 NVGN at 4.58…i like that its still down on the day even though its tried rebounding a bit from the morning open, if it takes out the morning low of 4.25, its got no support whatsoever until the $2s so it could drop big…remember in my morning watchlist, i noted how this stock tripled form $2 to $6 basically just because its in the hot biotech space…I expect to bank on this one, but I will cut losses quickly if it starts spiking unexpectedly
The thing continues downtrending nicely, when I go on a mission to discover why its up so much. As I outline what to look for in my TIMfundamentals instructional DVD, one of my first stops is NVGN’s quote page on Google Finance and guess what I see?
I see THIS article was just written a few minutes before I shorted based on price action alone.
An intrepid Australian–NVGN is traded on the ASX (see that Yahoo! Finance quote HERE)–reported Rebecca Urban did some digging and discovered the Australian exchange asked the company whatsup with their stock price? They replied it was due to a blog post! Here’s the text of the article
IT’S been three years since the controversial Graham Kelly left Novogen, the listed cancer drug developer he helped to establish.
Yet when it comes to bolstering the company’s share price, he’s still got the knack.
At least the company thinks so, given its response to the Australian Securities Exchange after being questioned over a sudden 115 per cent increase to its share price yesterday morning.
With nothing new to report, Novogen could think of only one explanation for the surge: an “internet blog” established by an unidentified ex-employee, who sounds just like Kelly.
“The ex-employee left the company in 2006 and was the original founder of the company,” Novogen boss Christopher Naughton said in a note to the exchange.
“It is not the company’s practice to comment on, or comment about, internet chat lines or blogs.”
That might explain why Novogen’s spokesman was guarded when asked where in cyberspace this powerful blog might reside or what Kelly had said that could have had such an impact on the share price. (Interestingly, Novogen doesn’t have the same reservations about posting seven-year-old research reports from analysts on its website.)
Fortunately, CityBeat was able to track down the blog at www.kellymusings.com.
Kelly, who sparked media headlines in 2007 when he was hit with a $10 million tax assessment after the Australian Tax Office accused him of funnelling assets offshore, established the site last week.
He promises to provide “independent commentary” on the anti-cancer technology within Novogen Ltd and its subsidiary, Marshall Edwards Inc.
“This site has no connection to either company either officially or unofficially,” Kelly writes.
“It is nothing more than an opinion being offered by another shareholder.”
Kelly’s first posting was a spin on Novogen’s recent decision to scrap an ovarian cancer trial before it was completed to save costs. It may not be such bad news after all, reckons Kelly, who remains the company’s third-biggest investor.
He has even invited feedback on his musings, with one slightly cynical reader noting the positive effect on the stock price.
“I wonder who is selling into this strength?” queried the contributor.
“I hope you also will hold your … shares over the coming months.”
Now, we’re talking, I love when stocks surge exponentially due to investors who either use their own blogs or promoters to pump & dump the stock! It helps when the blogger is the 3rd largest shareholder in the company, I sooooo hope he’s using this opportunity to sell, aka dump into his pump
Anyway, below are some TIMalert subscriber testimonials because we’ve made a few thousand dollars already (I’m up about $2,000 unrealized so far and I’m holding this pump short at the time this post gets published since this is just the 1st down day and most people don’t even realize it’s a true pump and probable dump yet!) & the beautiful chart of this pump & probable dump, which makes it pretty clear as to why I think there’s more downside, at least to the low $3s in the next 1-2 days:
Out NVGN +1030 TIMMMMMMMMM U DA MAN…shorted 2k @ 4.50
-Traderjoe7
got in short at 4.38
-Sonid
Quick 100 bucks for me on NVGN…looking for another entry.
-Ormaggio
I’m short 2k shares NVGN from 4.50, already covered some other shares I had for $245 realized profit.
-Reaper
out of NVGN for $1336.80 profit!
-Goode
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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%)
