THERAMETRIX INC (TMXI) 2 15/16 +1/2. After soaring 39% on Friday, issue has advanced another 21% this morning. The shares are being lifted by news that after six months of full scale field testing, Therametrix has come up with a "major technology breakthrough" in the field of flameless thermal oxidation. But this story isn't about how TMXI's technology will create a greater than 60% reduction in the size of a typical non-recuperative flameless thermal oxidizer for the same processing capability or how it will offer, for the first time, a flameless thermal oxidizer for the destruction of hazardous liquids by direct injection into the oxidizer (a superior alternative to conventional incineration). This story is about playing momentum stocks. I guarantee you that most of the people who traded TMXI shares on Friday have no idea the potential of this new technology. Neither do I. But what is important is that this was one of the hottest stocks on the Nasdaq Friday. As such, the issue was sure to attract momentum traders who could give a rat's behind what the revenue potential of this product actually is, as long as the news sounded titillating enough to attract new cash. Most of these folks won't be around for long. In fact, they'll probably start unloading the shares by mid-day. And once this issue starts to lose upward momentum, it will not be long before the bottom completely falls out, possibly causing the stock to tumble back to the level traded before the news was released. There's big money to be made in these types of stocks, going long while the shares are still hot and shorting once profit-taking begins to hit. For those who are not very good at timing the long-side of the trade, the simplest strategy is to see which stocks led the Nasdaq largest percentage gainers list that day and go long the stock right before the close. (Of course, you want to limit yourself to stocks with strong volume and a reasonable bid-ask spread).
From Briefing.com |
