CBIO daytrade for 3/29/2017
This week specific microturd stocks have been getting a lot of exuberant action to the upside. $CBIO (Catalyst Biosciences) stock is our supernova highlight of the day. The stock went up nearly +200% yesterday and today went up another +30% in pre-market trading (a total of around +300% in two days). The news that caused the stock to spike was that one of their hemophilia drugs got the OK to proceed with clinical trials in South Korea.
Our take on the news was that it was fluff, a non-event for the nanocap stock -- pure stock manipulation. As to why it went up 200% yesterday? Answer: There are a lot of people who chase garbage stocks all day and just buy regardless of news, fundamentals, and rationality. And more reasons why can be read here on our previously detailed "what are nanocaps" post. The stock has a float of ~600k shares, and yesterday it traded over 20 million shares! With the recent insane multi-day moves of other nanocap runners $HTGM, $DRYS, and $ETRM in the back of my mind, we were very cautious to short $CBIO with any kind of big size. We actually hoped the retards would lift this stock to $22+ / share right at the open, but that didn't happen. In fear of missing out on the drop, we starting shorting Catalyst Biosciences stock with only 500 shares at $17.01 but kept adding to the position the lower it went. The crazy volume that occurred in the stock yesterday was absent today so that partially indicated to us the stock would sell-off today (= the stock manipulators abandoned ship).
Five hours later we covered the turd for a nice easy $5,370 profit! Will $CBIO go even lower throughout the week? Probably. But we wanted to cash in and move on.
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RRD daytrade for 3/28/2017
We are always on the lookout for overly beaten down stocks with daily charts resembling rocks falling off a cliff. Sometimes they make prime picks for bottom picking, assuming the only reason they are going down is because a huge fund is just liquidating its stake. An example of this is the stock $RRD (RR Donnelley & Sons). It has been trending down since its February 28th decent earnings release and in-line forward guidance forecast, where it closed at $16.55 that day.
One month later, $RRD stock hit a low of $11.02 today -- that's a -33% decline on no concrete news. We speculate that funds are blowing out of this thinly traded stock and ignoring the cheap valuation the stock is now trading it. Either something is wrong with the company that news hasn't been publicized yet or it's just a screaming buy. We are thinking the latter and decided to buy some for a bounce today.
We entered the $RRD long position at $11.09 today and added into strength when the tape showed that buyers were ticking the stock up (and the massive sellers were not grinding it down). We did not see a huge block print (something around 300,000+ shares would have been nice) near the bottom of the lows today so decided not to swing long the position and just daytrade it. Took profits into strength and ended up with a nice and easy stress-free trade.
Net Profit: +$3,344
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BASI daytrade for 2/28/2017
We shorted this Bioanalytical Systems ($BASI stock) today. This was the 2nd day run up on no news. Stock ended up trading ~3x its float today which signals massive stock manipulation, which doesn't bode too well for it holding its +100% run gain this week.
Reasons why we initiated the short position in BASI like all the other microturd pumps are because the company is running on fumes in terms of its cash position as well as the insane +100% pop in 2 days. The trade was pretty straight forward....shorted into pops and covered into weakness.
Net Profit: +$3,458
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KEM daytrade for 2/24/2017
When a listed stock has a parabolic rise for any reason, we take note of the much desired price movement and watch for signs of eventual topping out, making it a prime example for a short scalp. This is what happened in KEMET Corporation ($KEM stock) last Thursday and Friday. KEMET announced Thursday that it will acquire NEC TOKIN from NEC. Since NEC TOKIN will be debt-free, Wall Street gave this acquisition a big two thumbs up as the combined company will have a much stronger balance sheet and greater EBITDA sending the stock up +40% in two days.
Looking for signs of increased volume on the 1 minute charts as well as watching the tape to determine that sellers were now stepping in (either long sellers taking profits or short sellers initiating positions), we patiently waited until we felt those two signs were being observed in $KEM. When the stock was up around +37% on the NEC TOKIN news, we started our short position at $11.65. As the stock rose but the tape painted bigger sellers/shorters were coming in, we were confident to add to our short position into strength. One of the keys to being a contrarian trader is not to get shaken out when things go against you especially when the tape indicates and reinforces your trade thesis. In this case with $KEM, as long as new sellers were stepping in and whacking bids we knew the buyers would eventually get exhausted and the stock would turn down because portfolio managers will always take profits on a +40% rise in a NYSE stock.
When longs take profits, short sellers start positions, and long buying diminishes, you get a nice stock fade down. That is exactly what we saw in $KEM when it slowly worked its way down from $11.60s to $11.30 in a hour's time. Once it seemed like the easy down move was reaching a wall, we decided to cover and run with the money on a Friday afternoon. If we had more time before the market closed, we would have tried to ride the short down further.
The $KEM short trade was successful and netted us profits of +$3,050!
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GLBS trade for 11/28/2016
The drybulk microcap mania continues today! Almost virtually bankrupt Globus Maritime ($GLBS stock) ascended +129% today on no relevant news today. Before the market opened, $GLBS filed a 6-K regarding a possible shelf offering so a run-up in stock price today was just plain idiotic. We took this opportunity to initiate an extremely cautious tiny short position in the name (as you never know how high these microturds will fly) and would continue to short more on any possible $DRYS-like multi-day rip. Unfortunately we did not get a DryShips-like move and the stock was abruptly halted by the Nasdaq for an information request today.
During the halt, $GLBS released a pr detailing their new $5M equity private placement -- issuance of 5M shares of common stock + warrant to purchase 25M shares at $1.60. Yes ... $1.60, when the last trade on the stock right before the halt was $7.32, and fyi the company had only 2.6M shares outstanding coming into today! Major share dilution! Longs got slaughtered again and we covered this turd into weakness.
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Net Profit: $9,608
CAL trade for 11/23/2016
Retailers have been going berserk since Trump won the election. And with black Friday coming up, investors usually chase retailers up more than they should. Today $CAL (Caleres stock) reported in-line earnings and yearly guidance but the stock was taken up +17% on the day. We thought this was a classic example of black Friday retailers chasing as well as end of the year sheep portfolio managers trying to catch the S&P index performance by buying anything that was making new highs on the daily charts.
We initiated a short position in $CAL at $33.27 and added to the position into weakness as we saw sellers come in. Once it went below vwap we started to take profits and close out the position.
All trades are called out live in the MookTrader stock chat room as they happen real-time. Not a big trade but an easy one right before the Thanksgiving holidays!
Net Profit: +$2,341
HTGM trade for 10/12/2016
Here's another prime example of why nanocap stocks are easy shorts for traders who have balls to step in front of the train. Today HTG Molecular Diagnostics ($HTGM stock) announced a vague development program with some big German companies. No concrete financial terms were mentioned at all in the press release. This for us was a clue to get short on any possible price rips $HTGM may have that day. In addition, if you look at its daily chart, all the days it had big pops (+30% price increases) the stock was easily squashed back down meaning big gains never hold for $HTGM. Financially, the company doesn't make a dime either (-$22.1M EBITDA) adding to our conviction the company is a piece of garbage.
We shorted the stock into strength because we knew it was going to come back down after the sheep longs find out that they are holding the bag on this turd. Covered into weakness as expected and made a nice handsome profit. All trades and ideas are called out and executed live in the MookTrader stock chat room. Come trade with us!
Net Profit on this trade: +$8.048
GNK trade for 10/6/2016
Thinly traded low-float stocks usually have exacerbated moves to the upside or downside when material news hits the stock. Genco Shipping & Trading ($GNK stock) went up around +75% today at its intraday peak on news that it sold $125 million worth of preferred stock to investors. This deal may have alleviated some of Genco's liquidity issues for the short-term however it didn't solve any of the company's money losing operations or reduce any of the company's massive debt (which measured around 18x its current market capitalization).
We felt that an insane run-up of +60% for $GNK stock on this news was unwarranted and initiated a short position. We confidently added to the short as the stock climbed up. Blind long chasers who do not know how to comprehend Genco's horrible balance sheet were at work trying to move the stock to the upside. These sheep always lose at the end as the artificial rise in the stock eventually crumbles and goes back down to where it should belong. Covered the short position into weakness and made some easy bucks. All stock trades are detailed out live in the MookTrader chat room to all our members as the trade happens real-time. Follow us in the trade or simply watch the daytrade unfold to learn how we consistently take money out of the stock market daily.
Net Profit: +$3,415
HTZ trade for 9/28/2016
Negative European car rental outlooks yesterday from Avis ($CAR stock) sent rival Hertz Global ($HTZ stock) stock tumbling -15% in 2 days. After an unsuccessful bottom pick yesterday, we decided to give it another try today as we felt Hertz is a value buy based off comparing their eps growth rate and forward p/e ratio. Their eps growth rate is around double their forward p/e ratio making it a fundamental buy.
When the tape told us that buyers were stepping up to support the stock, we jumped back in. This time we caught the bottom pick just right and rode it quickly for a nice profit. We would have liked to hold the long position for more price appreciation but decided to just take profits as the stock stalled on the upside move temporarily.
Net profit: +$3,549.
YRD trade for 8/25/2016
China announced new lending rules for China's P2P (peer to peer) industry, which is the main business for $YRD (Yirendai stock). The new regulations provided a severe negative headline for momentum longs to dump $YRD stock as the stock ran up from $6 to $42 in the past 6 months.
After doing some due diligence reading $YRD's F-1 filing, we found out that the average loan size $YRD provides its customers was well below the RMB200,000 max limit amount, as well as the amount investors were willing to lend out to customers (which we tweeted about yesterday). And today's follow-up news stories provided us more clarity into how the new P2P lending rules would affect the main players in China like $YRD. Most have commented that they would actually benefit from the restrictions as many already comply with the new requirements and the chop shops which don't/can't would go under. In summary, the news was just a negative headline but something that shouldn't affect $YRD materially.
We loaded up on $YRD stock once again after the opening bell weakness and added to the position once we felt a buyer(s) was working an order to accumulate shares. Shares went down -20% yesterday and another -10% within 30 minutes from the open today all on the unwarranted negative reaction to the P2P regulation we talked about above. The initial plan was to swing the long position on oversold conditions but we had to sell once it made an upside para-like move when the stock turned green on the day. Unfortunately in hindsight, it turns out we got shaken out as the stock rose another three dollars within an hour from our exit!
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Net Profit: +$7,505
