25th May - Swing Charts

Hey guys, here's a few interesting charts I found. These could make for very good swing trades if the markets keep heading higher - as these are mostly long setups. Good luck to everyone

1) Hawaiian Holdings ($HA) - {Breakout Play}

Very strong overall chart, nearing a break out at key $15 resistance.

Risk: $14.32 (4%)

Reward: $15.00 +

2) American Airlines Group ($AAL) - {Breakout Play}

Strong overall bullish chart. Has been making higher lows. Notice how it maintains $39.00 area in spite of lower volume $40.00 could be key. Risk is higher low

Risk: $37.76 (3.5%) 

Reward: $40.00 +

3) Cemax S.A.B ($CX) - {Breakout Play}

Strong overall chart. Has been making higher lows so should make for good risk/reward

Risk: $12.50 (2.8%)

Reward: $13.00 +

4) Thompson Creek Metals Company ($TC) - {Breakout Play}

Has been making higher lows. Very unlikely that it would break $3.00, but could at least reach it if volume keeps up. Higher percentage risk. Should actually be higher based on where support is, so be careful with size on this one

Risk: $2.72 (5.5%)

Reward: $3.00 

5) CYS Investments ($CYS) - {Breakout Play}

Looks to be squeezing higher. Has been making higher lows.

Risk: $8.80 (2.7%)

Reward: $9.50 

6) Veeva Systems ($VEEV) - {Squeeze Play}

Has a short interest of 23.66% and seems to be bottoming out. Would have loved to see it report good news at some point, but this break out above $20 could start to scare shorts. Lower priority for me, but would be watching.

7) Trulia Inc. ($TRLA) - {Squeeze Play}

Similar idea as $VEEV above. Has very high short interest - 41.43%. Would have loved to seen it report to good news to scare some shorties. Could get interesting if it breaks $40 but lower priority for me right now. 

8) Walter Investment Management Corp. ($WAC)  - {Squeeze Play}

Short interest is 20.25%. Had a nice run after reporting earnings on May 8th. Watching to see how it acts around $30.00

Good luck to every one this week. Signed The Rock Trader

You can follow me on twitter HERE - @rock_alerts

The 9 Minute Swing Trade

Since Tim wouldn't stop bombarding my email with threats about calling "his Lawyer". I thought I might give his lawyers some interesting info to work with. Well look what I found while going through my inbox.

 Notice the statement "goal is to make 15%-30% in 1-2 days short-term". Also notice the posting time; 05/06 12:17:59 PM.
 Now look what happens 9 minutes later

I call this the "9 minute Swing Trade". I use the term Swing Trade because that's the term for a trade that lasts between 1-2 days. And I use the term "9 minute" because the trade was closed within 9 minutes. Now of course, this trade isn't illegal. Just thought it was interesting to see what can happen when "several chatrooms/newsletters piggyback...." on a trade.

In Conclusion: Tim, I don't scare easy. Want to call your lawyers? Fine. The Rock Trader's lawyers will be in contact with you soon as well. And trust me, I have some pretty damn good lawyers. In other words, Bring it on!

I've been pretty distracted lately but here's my trade-tip for the day.

Trade tip of the day: I am pretty short-biased on $FEYE going into tomorrow's lock-up expiration. Will be watching this one very closely.

Have a good-day everyone. Signed The Rock Trader

Note: I understand that Profit.ly owns the Intellectual Property/Copy-wright to the text above. However, I am using these texts under the "Fair use" Intellectual Property Law

How to Run A Pump and Dump

The OTC markets have slowed down recently so I have been a slightly more cautious with my trading. One stock did catch my eye on my scanner - $MEDL (Mobile Holdings Inc). $MEDL might seem familiar to subscribers of Timothy Sykes newsletter service. I thought this might be a good opportunity for me to teach you guys how to run a Pump and dump. Take notes guys this is about to get interesting.

Step 1: Buy Up a tonne of Shares in the Micro-cap stock of your choice

This is important guys, if you wanna run a pump and dump you have to get in first. I suppose this part must seem pretty obvious, but I think it is very important for people with little experience on pumping stocks. Above shows the Time/Sales history of $MEDL between 9:30AM (Market Open) and 9:49AM EST. For those who may not know, the "Time/Sales" shows the amount of shares traded. It also shows the time at which the trade was executed. You can find this information on most trading platforms. Personally, I use Equity Feed for my Level 2 and Time/sales information.  The picture above may not be very clear so I will show you a simple excel screenshot showing the trading executions.

The screenshot above shows the total summation of shares traded in $MEDL between 9:30AM to 9:49AM. The summation was calculated with Microsoft Excel. As you can clearly see, a total of 142300 shares had been traded between 9:30AM to 9:49AM. Thus completes step 1. Note, thousands more shares were purchased minutes after my screenshot. So I cannot be sure exactly when this "guru's" very first or last purchase of $MEDL was, I certainly cannot verify if he was the first, second or third buyer. The time/sales history above shows the "overall" trade history between the specified time.

Step 2: Send a buy "Alert" to your subscribers

Check. Easy part assuming you already have a solid subscriber base. Try to come up with a good reason for them to buy. If you can find a nicely written article online to support your position, that usually helps. I'll give you an example of what a good "alert" should look like.

Above is a great example of a good alert. Notice some key words; "Facebook" - A $152 Billion dollar company. Also observe the potential gains "Microcaps can run 30-50-100%", this is sure to get people interested! Notice how this stock guru - Timothy Sykes - claims to have bought 142500 shares of $MEDL at the time of the alert (9:51 AM). Does that number seem  familiar? Refer back to Step 1. The time/sales shows that 142300 shares were purchased by 9:49 AM. This means that most of the shares purchased in $MEDL were purchased by this guru. This is great because you would want maximize your gains from the Pump, if this were one. 

Step 3: Dump your shares on Subscribers for Some Solid Profits

So now you've done the hard work. You've purchased the shares, sent out the alerts now its time to make bank! Dump your shares and ring that cash register, you've earned it!

Congratulations! You just made bank on your own subscribers.

Notice the intra-day chart below.

Important to note; Only Tim himself would know his true intention. I am not accusing him of "dumping" shares on subscribers purposely. But having a strong follower base would definitely help create spikes in stocks.

Homework Questions: 1) Would this stock have spiked as quickly as it did if this guru didn't have a large subscriber base?

2) Would the guru have made as much money on this trade without sending out his "alert"?

Well at least people made money off short-selling $MEDL

Hmmm...seems like these guys above think $MEDL was a pump.

Note: As you can see, the above post has been written with some humor in mind. I'm certainly not suggesting anyone performs a "pump and dump". The point of this post is to draw comparisons between this trade and what a "pump and dump" looks like.

I am not accusing this guru of running a pump and dump. However I do think this would be great way to run one if you had a solid subscriber/ follower base. I mean as far as I know, $MEDL DO have a working relationship with Facebook. So that part of the guru's statement was not "false". I do find it quite fascinating that this "guru" thought this rumor could make the stock run, but somehow he seems to be one of the few buyers of the stock before his "alert". This article simply expresses my opinion which is; this trade closely resembles a "Pump and Dump". This is very different from accusing Tim of being a "Pump and Dumper".

Tim himself said in his chat-room "MEDL certainly trades like a pump & dump...". If even he himself observed the similarity between the way MEDL trades and a "pump & dump", he cannot be surprised when someone else sees the same similarity and raises questions about it. Especially considering his history with stock promotion.

Timothy Sykes's History of Stock Promotion: In March of 2012, Michael Goode wrote a very intriguing article about Sykes and stock promotion. The article was titled "On Timothy Sykes becoming a Stock Promoter and Promoting IRYS" The article basically describes how Timothy Sykes was compensated $100,000 to promote IRYS. Thats right, I said it. Timothy Sykes was compensated to promote a stock. Here's an excerpt written by Michael Goode:

You can read the rest of his article HERE

Timothy Sykes wrote about this a couple of years ago. Here's an excerpt from Sykes blog : 

How nice of him to take the $100,000 for the good of his subscribers. The rest of Sykes article can be found HERE. 

Be careful who you trust, choose your 'guru' wisely and good-luck seeking alpha. Signed the Rock Trader

You can follow me on Twitter here - @rock_alerts

Trade Recap: Profiting from Predictable Patterns

So today, $DRL-Doral Financial had another insane move closing near 25% above Friday's close. It traded nearly 11 million shares today and has now almost doubled since Thursday. I traded $DRL intraday a few times today and came out with a pretty decent profit. Today, I'm going to emphasize why its' important to understand how a specific stock acts. I will show you the intra-day chart for $DRL from Friday first.

So the image on the left shows $DRL intra-day chart from Friday. The blue resistance line is the $3.00 mark. As you can see, the stock shot straight the day until about late afternoon when it hit the $3.00 mark and pulled back. This is a very significant point in the chart. Because not only is it a resistance point, it is also at a whole number  - $3.00. Whole numbers are very important "psychological" points in technical analysis. This is partly due to the fact that a lot of people put their stop losses at whole number points. As you can see on the chart, $DRL had a slow "grind" upwards for the next two hours. As soon as it broke through the $3.00 mark, it ripped upwards and had a high of about $4.00. Unfortunately, I was away from my trading desk when the break-out occurred so I did take advantage of it. You can see what happens after $DRL acted it went "parabolic". "Parabolic" simply means a stock has gone straight up very quickly without a pull back or consolidation. Usually when a stock moves up this quickly, the eventual drop is very sudden. So as it usually occurs in parabolic stock moves, $DRL eventually pulled back down and closed around $3.00. I took a small short position during Friday's late afternoon fade, but I did not hold for very long though because I was worrisome that $DRL's low float (Just 6 million shares) could lead to a short squeeze. I did however add it to my watchlist going into this week.
Monday Intra-day:
Now I'm gonna show you today's (Monday) intra-day chart for $DRL

Now the image on the right was the chart for today (Monday). As you can see, it is very similar to Friday's intra-day chart. As soon as I saw the stock price break above $3.48, I knew it had a good chance of squeezing to above the $4.00 range. This is why it is important to understand what stock you're trading and how it moves. Its also very important not to try to "guess" when the pull-back would happen. As you can see, at $4.00 the chart was pretty over-extended already. But if you went ahead and shorted at $4, you would have been been down 10% as the squeeze continued. This kind of move is very common with low float stocks so it is important to be patient with short positions. I had three good shorts on $DRL. 1st short was at $4.09 then covered at $3.97. Second short was $3.96 the covered at $3.84. Third short was at $4.19 (on the bounce) and covered at $4.02 into the wash-out. Three small scalps but profits and consistency add up. So quick recap on what we learned today:

1. Study the stocks you have on your watch-list for predictable moves
2. Exercise patience when starting a short position on a "parabolic" move, trying to "guess" the top can be very risky.
3. Always take your profits when you have them, you can never go broke by taking profits.

Hope this helps you on you trading journey. Good luck seeking alpha

Follow me on twitter here - @rock_alerts

Timothy Sykes, Short Selling and Racist Tweets

We can disagree on trading positions all day, there is nothing wrong or new about that. People have disagreed  on trades since Wall Street was just a wall. But I think we can all agree there is no place for racism simply because you disagree with someone's opinion on a trade. The lowest point about today's Twitter argument regarding $PGFY-which most of you witnessed - was Timothy Sykes racist tweet to Modern_rock. Take a look below for yourself.

The above tweet has now been deleted by Timothy Sykes, but I took this screenshot from someone who captured the tweet before he deleted it. Whether you were short $PGFY, long $PGFY or had no position on it - like myself - I think we can all agree that there is no place for this time of racism nor was it necessary.  I found myself wondering what consequences Tim Sykes would face if he were a more public figure. After all, Donald Sterling - the owner of the NBA Los Angelos Clippers - was given a lifetime ban for his racist remarks. Hopefully Timothy Sykes can conduct himself with more class or at the very least leave the racist language out of arguments.

For those who are unaware what the arguement was about, below is a little background:

So the long awaited StockTips was finally released this weekend. The  pick as you probably already know was $PGFY - Pingify International Inc.

The smart money got in late last Friday, as the pick had been leaked onto StockTips Facebook page by a "VIP" member. Traders who got in early got a nice gap up on Monday morning to sell into. Going into Tuesday, Timothy Sykes and I got into a little argument about "Short selling" $PGFY. For the record, I had and have no position whatsoever in $PGFY. But as a "guru" it may serve Timothy Sykes well to appear to be perfect. Now I have no problem with that. I do not subscribe to Timothy Sykes nor would I recommend him. But I would confess, I do have a terrible allergy for Bullshit and I tend to call it out every now and then. Tim Sykes began tweeting what I would describe as "excuses" just in case he was wrong, I suppose in order not to lose subscribers. Here's how our conversation went

Now I understand the concept behind "finding shares", I short sell all the time, but since when did shorting pumps stop being about wins/losses? The last time I checked, people trade stocks in order to make profits not losses, so wins/losses do matter. But perhaps this is the persona he feels he needs to maintain - just my guess.

Above is another screenshot of our conversation. Curious to know what trading is about if it isn't about making profits and doing what you love. But hey, I don't claim to know everything. Notice below how Tim takes credit for someone else's hard-work. I suppose in the effort of promoting his "alerts" service and Profit.ly which he linked in his tweet.Cactus Trading hits the nail on the head with his tweet. I suppose Tim Sykes invented penny stock trading and shorting as well. Haha. Full disclosure; Elkwood66 (real name Eric Wood) is a millionaire trader whom - in my opinion - is NOT a Tim Sykes "Student" but a subscriber. He is also a subscriber to the InvestorsUnderground chatroom for which you can sign up HERE. Although he gave 'some' credit to Tim Sykes a couple years back in a youtube video, he made it pretty clear in a more recent video that Tim Sykes service was somewhat inadequate and that InvestorsUnderground took his trading to the next level. Just fast forward the video to 4:25, you can see the video HERE. Now this is not a recommendation for InvestorsUnderground, everyone is free to make their own choice, I just can't help but call out BS when I see it. In my opinion, Eric Wood made Eric Wood a successful trader, obviously with a lot help from others. A couple of Tim's subscribers cancelled within minutes, while he began attacking a prominent trader on twitter Modern_Rock. Modern Rock had been on long $PGFY, but stayed disciplined and still managed to make more money that Tim Sykes by short selling $PGFY intra-day. Modern Rock is one the best traders out there and is always willing to give free and valuable advice. I recommend you follow him on twitter HERE if you haven't already.

 Above shows a picture of a cancelled Tim Alerts subscription. Below is a picture of another cancelled subscriber.

As you can see from the "renew" date, these are two different subscribers who cancelled within minutes. This pressured Tim Sykes to eventually backpedal and issue an "apology" - if I can even call it that. My guess is his "apology" was made due to the fear of losing "subscribers". Subscribers that help put money in his pocket but somehow he fails to treat them with respect.



I wrote this blog just to clarify questions I had gotten regarding today's twitter argument between Timothy Sykes and myself. I would be posting more trading recaps in future blogs and explaining more chart patterns.

You can follow me on twitter here - @rock_alerts ...Good luck seeking alpha,
Signed, Rock Trader

The Irony of People Protectors

Short sellers have profited from Stock manipulation and promotions for years. Timothy Sykes has popularized the idea of short selling "Super nova's" - Over extended chart patterns of penny stock promotions. A new breed of short sellers have descended upon the OTC market over the last couple of years. I like to call these traders "People protectors". The irony of this title is this breed of traders couldn't care less about people. They use tweets and articles to scare people into dumping their stock, hence profiting from short positions. A tactic not so dissimilar from the Seeking Alpha pumps on the long side we have seen over the last few months or more. Below is a picture of one of the more notable Seeking Alpha 'pumps' - YOD.
 The image on the left shows the chart for YOD - You On Demand Inc. The highlighted section shows the impact of Seeking Alpha's positive article. The article described YOD as "The Netflix of China". The stock price went from $2.50 to over $7.00, and has now come back down to $2.70. Short sellers have now taken to Seeking Alpha to promote their short positions and create panic in promoted stocks. As a short seller myself, I do not deny that these "dumps" in promoted stocks are inevitable. But there is no doubt that Seeking Alpha articles can certainly hasten the process. One of such Seeking Alpha short sellers is  Penny Stock Realist. His strategy involves short selling promotions. Most of his shorts usually involve writing seeking alpha articles. To be clear, I have no personal issue against Penny Stock Realist. But I do find it very ironic that he spends as much time bashing promoters but profits off of them. As short sellers, what would we short if promos or manipulation did not exist? Isn't bashing promoters biting the hands that feed him? As for the idea of "protecting people', will Penny Stock Realist spend time writing articles to bash promos if he did not have a financial incentive to do so? Fact is...Stock Realist doesn't give a crap about people. He writes articles to scare stock holders into selling their shares hence sending the stock price lower, leading to profits on his short position. But hey, I have no problem with wanting to make profits either on the long side or short side. After all, I am a proud capitalist. My only disagreement with Stock Realist is this; Why does posing as a "people protector", bashing stocks and profiting from promos make one much different from the Promoters themselves? Fact is Short sellers benefit from Promos just as much as the promoters themselves. Wonder what these "People protectors" would do if Promoters ever went out of business. A question that shut Stock Realist up and left him dumbfounded. I guess he's never thought about that. Just my two cents.