Today I had a decent green day. I did have a lot of ideas that would have worked that I never took advantage of (and some losers too to be fair) but overall I had a decent read on a lot of the stuff today.
SAEX: This was my main gainer today. I originally put an offer at vwap after it stuffed since it seemed to have fit the criteria of what I mentioned in last night's post about a stock going under vwap and stuffing and then pops to vwap work. I took it off because I thought it didn't seem right though as it got closer to my offer. This was a good choice. I shorted it after it got under vwap and stuffed hard and stopped people out and covered when it made new lows in the 9.80s. I had no expectation that it would fade all day like it did. Looking at the prior daily candles it does close at the lows so it could have been an all day thing I guess but I thought it would at least consolidate then go lower again instead of just straight fade. Profit is profit I guess and I'm not sure if I would have shorted it again since it made a new low and then came back. Goes to show again: thesis > minute price action although I didn't have the thesis that it would fade this much as I couldn't tell there was any dilution going on. I should say instead big picture > minute price action. I also saw this on a other names today where they looked like they reclaimed vwap but then continued faded afterwards so it all really depends. I have to keep an open mind as to what is possible and what the stock will do before it does what I want or stops me out. Going back to almost shorting at vwap before the stuff, I am trying to see if there are any parameters that I can see that would aid in knowing when to short it at vwap and when not to. This was a tricky one. Perhaps the best one can do is just not stop out right away although it went $1 past vwap before coming off. So it's tough and each stock does it's own thing. We just have to react to it. I'm not sure if there is anything else to say other than to add instead of cover in situations like that.
EYES: I shorted this at vwap and it went higher so I added on the stuff which was good. I covered the add though on a pop above vwap which was stupid but I wanted to be safe. It came back to the lows and I waited for it to break down and it never did. It looked like it was going to so I added in bigger size to scalp the move to new lows but the bid absorbed so I got out on the added size then just covered when it went above vwap near the top unfortunately. Only lesson here was that it was good to add instead of cover but I should have been more thoughtful with covering on the pop beforehand. I didn't want to have the added size and it ends up going slightly higher though.
Other ideas of note:
UA: It looked a little like an ABCD in the morning above vwap but I think I was putting too much thought into it. It could have worked of course but I never got in there. My overall thesis was that it was way oversold for what the earnings were. I did see it put a higher low after some selling and I did think about buying there but never did. That would have worked well for a sell back to resistance. I had a feeling they washed the bounce players out.
GBT: I had a pretty good read on this and should have went in since I figured they were using this news to sell into based on SEC filings and the news wasn't that good anyway. It did trick me though because it went a bit higher first before coming back off. It had a really nice pattern at the highs that I wanted to short into but unfortunately never did. So the lesson here is that things can pop in situations like this (and SAEX) before fading. Also, I did see the huge volume stuff later in the day and saw someone got filled on huge size. I thought about shorting there but was afraid of it just ripping to vwap. I guess you have to trade what you see and that's it and not worry about what ifs.
DPRX: I saw it go parabolic and it halted. The halt is usually the top and it was here but I didn't short it. It had a similar pattern to HMNY when it halted. It came back again after flushing and I didn't bother there either. Lesson: Halts like this are usually the top.
HMNY: I saw it had a PR release and they just had their effect/prospectus out. I knew what was happening but the borrow was so expensive again. Unfortunately I didn't do it because of that and also I wasn't sure how low it would go. Well it definitely would have been worth it to do as it faded $2+ from the move. Lesson: Don't worry about the borrow fee and secondly short these great opportunities even when they come during the day like this one did.
Things to work on:
1. Look at prior daily candles to see how stock acts on gap up and fade days.
2. Big picture > minute price action. VWAP over/under stuff shouldn't affect a stock and a stock looking like it is reclaiming support like SAEX may just be bouncing for a lower high - it depends.
3. Add instead of covering in situations like SAEX and EYES.
4. On stocks like GBT that you think can fade right away, don't be afraid to short if they do pop a bit first.
5. Borrow fee = cost of doing business
6. Stocks that have PR like this during the day and not premkt are still good shorts when combined with an effect. (even when not combined with an effect)
7. Halts in certain situations are usually the top.
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