Two Penny Stocks That Made Me $550+ In Two Days
Monday and Tuesday of this week proved to be solid trading days for my portfolio. Over the weekend reports that the swine flu in Mexico caused huuuuge hype in the markets, particular all the swine flu penny stocks. I knew going into the Monday’s trading day that I wanted to buy one of these speculative penny stock plays after seeing how they’ve reacted in the past, but I wasn’t willing to buy one at the pre-market prices, as most of the penny stocks in the biotech sector were up 80%,90%,100%+.
So I brought up my watch list of potential swine flu penny stocks and thought of my game plan. It was pretty simple: I figured that I would buy the penny stock that was up the least amount of % in the watch list. Make’s sense right? Well the lucky winner was penny stock NNVC.OB. To make things even better, this company released a PR that same morning that specifically mentioned “swine flu” in it. Now there was 2 important reasons why I knew this stock could really potentially make me some money.
1) This stock was only up 30% pre-market according to the bid/ask (remember penny stocks trading on the OTCBB exchange don’t have pre-market buying/selling BUT they do print the bid/ask before the market opens –effectively the same thing except no shares are actually trading hands during this time). Other penny stocks were up over 100%+, so I figured that NNVC definitely had room to run especially considering it was already way behind compared to other penny stocks in its sector.
2) The PR they released that morning before the market open specifically mentioned “Swine Flu” in it. Now this was huge because none of the Biotech swine flu stocks, even those that were up 100%+, had a PR that mentioned “swine flu”.
As the market opened I put in my order for 3350 shares @ 1.04. I immediately got 1800 shares filled but then this thing took off skipping over the rest of my shares. Unfortunately I got the rest of my shares filled at 1.12 thus giving me an average of 3350 shares at 1.08. You gotta be quick!
Ended up going to 1.25 before some profit taking took place, causing it to drop down…then seeing that the other biotech penny stocks were dropping I got scared and sold my shares at 1.18. Shoulda sold some at 1.25 as I was too greedy and wanted more, but on the same token I’m glad I got scared and sold at 1.18 because you can see in the chart below where it closed..Solid $335 profit, though.
Now lets head on to yesterday (Tuesday) when in my premarket watchlist I said that DDRX was my top potential short. This penny stock opened up green but stalled for the first 10 minutes of the open. I knew that it might be the turning point for this sucker to go red on the day. Sure enough 5 minutes later the stock went into negative aka showed the weakness I wanted for this to make it a great short. I have never seen a penny stock drop so fast, I literally went to my brokerage to enter the short order and this thing had already dropped 7%. I finally got my order filled for 476 shares short @ 7.34. Wounded up going down to 7.00 in the next 5 minutes but I wanted more. At this point it was just going to be toughing out a short squeeze that I figured wouldn’t go too far considering the stock was now on our side (the short seller’s). I went to math class around 2 to take a test, that I think I made a 100 on, wooohoooo! Came back and planned on selling this sucker by the close because I just didn’t like the spread between the bid/ask and the sideways price action all coupled around the fact that this was a earnings play that may not give me fast negative move like I want. I wound up covering my shares at 3.85 for a cool $227 off of a perfect green-to-red move that I fully detail in my FREE eBook. I really think this penny stock would be a good hold for a week or two because of the total unsustainable run up this penny stock has gotten. But the patience that I have (An 18 year old) just isn’t there yet!
$596 Profit In 30 Minutes Shorting Penny Stock SCON
Take a look at the chart and memorize this classic chart pattern that almost always makes you $$$$ shorting penny stocks.
As I pointed out early this morning before the market opened in my penny stocks to watch, SCON was up 150%+ on an obvious hyped/manipulated run because there were no PR’s hitting the wires whatsoever on this penny stock. Look at this chart and tell me this is not a screaming short. Penny stocks just can’t keep going up and up and this one was no different. It went up tooo much tooo fast so the game plan for the morning, yes game plan (you should all have one as I pointed out in THIS post) was to watch for any weakness and short the weakness. At the market open we got a slight gap-up in this penny stock but the postive run up only lasted 5 minutes..after that it was weakness as sellers came into the stock at full speed. About 9:50am SCON went negative on the day – this was the weakness I was looking for. Now, I didn’t get a good entry price as it was dropping so quick and the bid/ask was going crazy but I wound up getting my 1290 shares short @ 2.71. From there it was a classic death spiral of a hyped penny stock on green-to-red price action. Think about it: If I was a stock promoter/pumper and I had a huge long positon in a stock that has gone up 2 consecutive days over 150% and on the 3rd day it opens up and things are looking great then all the sudden it goes negative/red on the day (something it hasn’t done in days) panic sets in and everyone sells which is why green-to-red works so well when shorting penny stocks. I explain this pattern further and how to short these penny stocks in my FREE eBook that if you haven’t already gotten, you should!
How I Lost $752 While In Spanish Class & The Lesson That Can Be Learned
If you read my penny stock watchlist on Wednesday you know that I was particularly interested in shorting DRL’s recent surge pointing out that a break on support at 4.22 would trigger a very good short entry. Well, on Wednesday morning we got that break at market open when DRL gapped down 4.10 and then further tanked to 3.70 in a matter of minutes. I wasn’t fast enough to short shares on the initial tank, and when the penny stock calmed down I still didn’t want to short it being down 15%+ already…fearing a short squeeze off the morning panic.
I was right on as the we got a short squeeze, but it really didn’t squeeze as much as I would’ve liked, but good enough for me to put in my order for 1000 shares short @ 3.94. I figured the odds were on my side for this penny stock to drop back down below the low of the day made earlier in the morning. I thought I was on the right track as it proceeded to drop to 3.82, but then quickly jumped back up to 4.00. It flat-lined at 4.00 for a few hours causing me to rethink my positioning in this penny stock especially since I had class within the hour. In my mind I was still confident we’d make an afternoon fade down to the low of the day or further…..
So I went to Spanish class short in a penny stock that I THOUGHT would have an afternoon fade. When class got out I figured I’d get back to my computer to see this sucker of a penny stock down to the low of the days. Yet the exact opposite happened…as I opened up my SogoTrade platform I saw that DRL 4.69! .75 cents above my shorting price! I got juiced! I quickly covered my position and absorbed my losses of $752.
This lose totally erased my nice $661 dollar gain on MDVX I made on April 7.
With all the bad that surrounded this trade, some good DID come out of it. Here’s a lesson that can be learned from my lousy trade.
Never have a short position (or any position for that matter) that you’re not confident in open while you’re away from your computer or can’t keep watch.
Also, another lesson I learned is that I shouldn’t go to class. Just kidding!
Hopefully with that lesson learned I can prevent this kind of mistake from happening again. For your viewing pleasure I’ve attached the chart I was looking at when I made & closed the trade.
