We should dig in the news release pattern.
I don't know if you use L2 and watch the market makers actions to decide upon entry.
The more I hang on exploiting short term runups, the less self-confident I am getting.
I closely watched different ones
To mention the steepest of them: CFON,XYBR,ENMD,SEVL,PQT,TRAC,LOCK,KLB,ITEX,CRDM,NAVR,WCAP,ZITL . You can look charts of these ones, what do you see. Just KTEL was different.
quote.yahoo.com
The "breaking" news are out very often in the mid (30%-40%) of the run-up (LOCK,PQT,SEVL,KLB) when volume soars but is not running. Not at the beginning.
Then the engine runs up to full power with the millions turnover in quarterhours.The news are repeated often then, which may be hours later, once again, in Reuters Realtime. Then usually it is time to enter a sell ladder. After the first big spike, quite often a second will follow up within hours. And then after languishing some days another one follows, especially accomplished by "Riley" or anybody else with a timely strong buy recommendation then.
(WCAP missed it because COOL dropped off in the meantime, WCAP was dropped in the news press much more quickly).
NAVR and SRCM are different deers, I did not follow that closely. As I remember, NAVR was of different style. The news claimed that this is not another brute-force runup but with a real story behind. Still, I have my doubts about NAVR.
Honestly, I did not get burned in the end but my nerves are blank now, for actions like selling CFON when it was eight only to find it at 15 on the next day. Or KLB at 12, then reverting into a straight long at 14 and shorting "the p. " at 17, the next day's AMEX indication was 24-30 completely erasing equity and nerves, but finally the matter was done, when you look the chart. The law of gravity succeeded.
Speaking for myself, I am also tempted to short the "piss out of them", but for solid gains I start with a little short position and enter several orders at higher prices, stepped by 3/8 if it is a stock beyond 10 or some 5/8 if it is above, it depends on the momentum. In KLB I turned round, because I learned a bit from CFON and decided it can double once more, which was right.
So I tend to sell into tho north side of the mountain, as it's difficult to establish an outright short position when the stock diminishes already. The last example was GMGC which had a nice runup to 7 3/8 and "begging" for a short. It retraced within hours to prices around 6. A ladder short following the runup earned me a short position with an average over 6 7/8, which was not too far away from the highest price.
Also in GMGC a second reaction occurred on the third day, sending the price to 6 3/4 again, which I used to establish a decent short at 6 9/16, as disclosed in Mr.P's thread.
For shorts, I use a strict limit of 30% of my equity for a single short position, and 75% overall. I introduced it after having been almost squeezed in CFON for having a too big short position which exceeded equity.
Usually I close out shorts soon and keep only a small position, say few 100 shares short, as I don't want to get stuck in a dull position too long (Especially, when it is beyond 5 and not at margin, it eats up much purchasing power).
I hope TAVA makes a ride again, so I can increase the gearing a bit.
Greetings
Christian |
