Friday was a positive day that had one winner and one loser. I had a bunch of ideas that I didn't take that worked out great. I was able to notice some things in real time but I did not capitalize on them. A lot of it had to do with the what ifs but on some of the bigger range stocks like HMNY I at least entertained going in with smaller size just to get in when I thought there was a good trade.
ALKS: This was sort of a stupid trade. It could have worked but there's a few things to note here. I shorted after it came off and then put an offer to short at vwap. The stock looked like it had failed follow through but at the same time these stocks usually chop around. While where I entered could have been a top to at least scalp from, I should have been more comfortable with the range of the stock. So I shorted against vwap but then it sprayed through to 57.40s and I was ok with it letting it test vwap over/under. Once it sprayed like that and looked like it stuffed, I put my stop above there thinking if it got above there then it would probably go higher. Unfortunately it sprayed past that and then came off. So while I stopped out for a loss, had I stayed in it would have been a flat trade for me I think because I would have put my stop at breakeven when it started to fade and when it went to vwap again and broke out I would have been out and that was it. So instead of taking a loss I would have been flat. The stock has $20 of range so I need to be ok with at least 10% of that or $2. Being ok with $2 of range on this type of play though isn't worth it. There was an opportunity that I saw before I actually shorted though - when it stuffed and then came back under vwap. That was a good pattern and I definitely did think about it then but I thought that overall it didn't mean much and that the stock could just chop around. So that line of thinking was a mistake there. Also, I should have looked at the longer term chart more to see the support around $54.50-$55. I don't know if I would have went long there but it was a good spot to cover once that area started to hold. Overall I'm not too worried that I didn't short it when it was first peaking vwap after that big volume bar because looking back had I shorted and it didn't work I would have been more pissed than I would be disappointed that I didn't short it and it worked. I can't predict everything nor should I.
CXRX: I saw this grinding higher and looked at the daily chart and saw that it was pretty beaten down and could have a bounce day so I wasn't too interested in shorting it unless it got parabolic for a scalp. But a lot of volume started coming in and it looked like it started topping out in the 5.45-5.50 range. I thought I could scalp this for a move back down so I shorted at 5.44 and gave it over/under the highs. I was well aware this could have kept going but I thought it was worth a shot and it seemed like people were waiting for a power move that never really came to short. It broke out to 5.55 but I didn't panic and I let it test around and in this case it just completely stuffed and that was it. I wanted to be smart with my covers since like I said the daily chart supported that it could go higher for another day or so so when I saw it holding in the 5.10 area I just covered there - I didn't want another DRWI situation although I shouldn't expect that of everything since that was just a fluke. It did end up going lower but it was ok. I am thinking if I should have added after the stuff confirmation and risk to that high. It worked here for sure but it wasn't the best type of play overall I think for that. Maybe once it stuffed on that red candle lower and started peaking a lower level, that would have been more confirmation and a chance to get in with size and give that to the mid 40s. I'll consider adding more on those red stuff candles.
Other ideas of note:
HMNY: I saw HMNY consolidating after the big move up. It looked very good for a move higher but I thought that since no one could short it, it would squeeze higher so I guess buyers/pumpers would have to get it there. So I wasn't too confident in it at that point since I thought that the move had happened and that it would just consolidate or maybe move lower at that point. Perhaps it was worth a shot when volume started coming in and it started breaking out a little bit. It did look like SAEX and BSPM from what I remember on day 1 when it made a huge move and then consolidated and had the exact same look and then went higher. BSPM more recently was a stock that not many could short so when stocks like this are not squeezing - they are getting pumped so if we can short it then it's an advantage if it sets up. So the next time a stock does something like that I'll be prepared and give it a shot. I will admit that I was afraid of that what if scenario of what if it dumps but I can't have any of that going on - I have to be fixed on the present and that is it. So it pushed to 10 and had some volume which could have been a stuff but it held a little bit and then went higher. So that is another reason to not trust the big volume right away like that but in this case after it had just broken out of a consolidation pattern like this - unless it was huge volume like it had when it went to 10.50 then it shouldn't be trusted as it being the top. Later on though I did correctly call out the top but again was too afraid to do anything in case I was wrong. I was thinking of getting in with small size but the borrow rate was expensive so I didn't want to bother - stupid thinking because it is just the cost of doing business!! Anyway, what I saw at the 12.80-13 level was good evidence of peaking action. When it unhalted it made a new high by one penny on some volume so that was red flag #1. Secondly, when it came off and then rebounded to the 12.80 level I was watching the level 2 and it could not get past that 12.80. Then 12.80 stepped away and the offer went to 12.85 and then came right back to 12.80 and I thought a stock that just ripped multiple points is now having difficulty going up 5-10 cents. So that was the top. After that it provided a lot of reshorts on stuffs as it eventually formed lower highs and then broke vwap. The first stuff wasn't too easy and I didn't want to short it in case because it looked like it reclaimed.
TWLO: I had the idea to buy dips as long as $40 held similar to the way PBYI did. I had a couple ideas to go long at vwap and give it a little room which would have worked but overall it was pretty choppy. I had the idea to go long on the dip and rip which would have worked but meh.
PRGO: I knew this was a rehash news events so I was looking to short it and it could not get above the $91 level at a certain point so I was thinking of shorting it there. Again I was afraid of what would happen if I was wrong but it worked great. I think I need to realize with reading the tape and level 2 action and such - it's not going to be 100% so just because it doesn't work one time, that doesn't mean it won't work in another scenario.
BTI: The only lesson for this is to keep things with low vol in premkt on watch during market hours because just because it has low vol during premkt doesn't mean it won't have good vol during the market. I was looking to short this on pops since short the acquirer usually works and it definitely did in this case.
NFLX: The only thing to note here is that I wanted to short it in the morning for a pullback. It offered some scalps but other than that it didn't really trend and after the news hit it kept going. The main point I wanted to make is that I thought about shorting it a couple of times when it kept pushing and failing in the high 125s. I didn't like it overall except for that fact so I avoided - the main thing is just because a stock gets rejected a couple of times doesn't mean it is the top.
DRWI: This was a scenario where it making a few cent high and no followthrough mattered. This had a huge volume candle and then to make sure all shorts were out it made a new high and that was it. I was monitoring this stock but it never really setup until that failed followthrough high but even then I wasn't completely sure.
Things to work on:
1. Be ok with bigger range and at least 10% of the range on this ranging stocks.
2. You can't predict everything, nor should you.
3. Look into adding some shares when a stock has the red candle stuff on volume. Those are usually tops.
4. Even when a stock is HTB for most people, when a stock consolidated in a familiar pattern like BSPM and SAEX did, then you should go long for another move higher.
5. NO WHAT IF'S NO MATTER WHAT - FOCUS ON THE PRESENT!
6.. Don't make the excuse of high borrow rate for not shorting - it is the cost of doing business!
7. When a stock is HTB at most placed and people can't short and looks like the move is done, definitely short it because it is just a pump and not a squeeze. They always go back down.
8. Sometimes reading the tape works and sometimes it doesn't but that doesn't mean you should avoid not doing it. You can use educated risk to try levels and have tight stops to see if levels on the tape hold.
9. Keep stocks on watch that may not have premkt vol but have potentials to be good plays during mkt hours.
10. Just because a stock makes a new high and doesn't have immediate followthrough doesn't always mean that is the top - it depends on the situation.
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