after yesterday´s terrible trading, today was a quite good day. Three small trades – three small wins. This time I explicitly paid attention above all not to go against the plan that I had formulated pre-market.
So… let´s just get right into it.
This morning. On the top of my watchilst were three stocks.
The first one was CANF (Can-Fite BioPharma Ltd., Biotechnology Sector). CANF gapped up around 20% this morning on news of an analyst upgrade to $8.
Let´s have a look a t the daily chart to get a general feeling of how CANF has been trading in the past…
This stock just toxic. It has been selling off for years and usually does not hold gap ups very well.
My plan was to wait for at least the first three minutes to get a general feel of how CANF was trading. Depending on the trading action, I wanted to short into VWAP with either a risk of pre-market highs of $1.62 or next resistance at $1.72. Close to the market open CANF already traded far off these pre-market highs which gave me more confidence that most chasers would bail out.
When the market opened, my plan worked out quite well. CANF fought at VWAP and I got short at $1.51. I must admit that this was almost a little chase again and I definitely could have gotten a better entry. When CANF flushed to $1.4 I covered at $1.42. CANF bounced to $1.47 before going lower. Here, previous support became resistance and I should definitely have put on the short again. However, I did not and left CANF for the rest of the day.
GLMD (Galmed Pharmaceuticals Ltd., Biotechnology Sector) was the second stock I was watching. Yesterday, GLMD gapped from around $7 to $25 on admittedly very positive news. After reaching a high of $27.55 it sold off for the rest of the day. Both the positive news and the fact that GLMD had already been selling off for the previous day, put me a little off when thinking about shorting it today. Nevertheless, I was convinced that this would sell off more today.
I determined the $18.8 level as key resistance from yesterday and wanted to short GLMD into VWAP with this level as risk. The market opened and GLMD spiked exactly to this level, topped out there and started selling off quite considerably. Because I was busy with CANF I did not trade GLMD. The overall thesis seems to have been correct though.
The third stock on my watchlist was VTGN (VistaGen Therapeutics Inc., Biotechnology Sector). VTGN gapped up on patent news this morning. The interesting fact about VTGN is that it usually does not hold gap ups at all. On the daily chart below, we see that just in the last weeks two significant gap ups were used to sell right into. Given the rather pathetic news today, I expected similar things to happen.
VTGN confirmed my view and was very weak during the morning. But due to my CANF trade, I did not trade this either.
The second stock that I ended up trading was SEII (Sharing Economy International Inc., Industrial Goods). Some pumper took advantage of the “incredible” PR that SEII would enter into a licensing agreement to create an internet site in North Korea to pump the stock in the morning. When SEII fell below VWAP I shorted at $4.44. To be honest, I expected the stock to quickly reach $4.2 but I guess that the manipulations continued and when $4.3 did not break I covered at $4.36. Shortly thereafter, SEII tried to break VWAP yet again. However, the tape seemed very weak and so I decided to put the trade on again at $4.48. Again, SEII was not as weak as expected and thus I covered at $4.4. A few seconds later, SEII spiked again. At this point I wanted to put the trade on for a third time. However, it was almost 11:00 and I wanted to follow my rule not to put on trades around lull.
Overall, I am quite happy with how I traded SEII.
Given my overall goals, I would give myself a C today.
Let´s see what will happen tomorrow.