Sunday, October 13, 2013

A detailed look of my possible short on $VISN tomorrow.

   I decided to spend some time to lay down a plan for a possible short tomorrow in VISN since a stock is pretty hard to trade.
   It is very volatile, thin and buyers are very aggressive. These reasons are making it hard to make a precise entry. In cases like this a solid gameplan is a must!
Otherwise you'll get smashed and stoploss is guaranteed.

I call a stock is Green when a daily candle of a stock is green (last price is higher then the Open) and call it Red when a daily candle is Red ( last price is below Open).

The reason I mention that is because a lot of people name a color of a stock by comparing last price with a previous day close.

General idea of shorting pumps and when you have an edge.

The lower the Open compared to previous day close (gap down), the bigger the chance of a stock to go Green and stay green on a day.
The bigger the gap up - the bigger the chance of a stock to turn Red and stay red on a day.
These setups are for situations when a stock already reached a definition of a pump.

I call pump everything that went up 50-100% and more in 1-3 days. It can have news, PR, earnings, insider buying, FDA and so on. It is still a pump for me. The only difference is that I would approach a short with more or less aggression, may or may not keep it overnight.

...back to VISN.

Stock went 200+% on fuck knows what.
Last earnings were in the beginning of September and were not great.  Near $7.50 the management of a company refused to comment on an unusual activity in a stock price (rather typical symptom of an end of the move).

So my thought process is this:
I see a stock going lower in near future but I want to have an edge...

  1. I already know that I want a stock to gap up before I would start thinking of a short.
  2. if it gaps up but still under $7 I would want it to go $7+ and short a parabolic near 7.50 or a fake of 7. Then add on going Red (GreenToRed) and possible EOD support crack. Stop HOD/$7.
  3. if a stock opens above $7, I would 
  • look to short "7 wash/going Red" right from the Open and look to swing it with a stop at Open (going Green) . Swing target $5-.
  • or if still strong - short on parabolic towards 8 with Open as a first target, stop HOD/$8.
    Then add on GtR. If acts right and stays Red, keep it swing with $4-5 as a target.
Hope you will benefit from this article when shorting VISN and other pumps to come.
Stay alert and calm. 
Always have a plan!