Shared by
foldelinio_BOWS
Stop: 9.20$
R: 3
Had this stock in the back off my mind and had a look at the chart at the right moment.
It spiked into yesterdays resistance two times already so I shorted into the third attempt.
Tape was rather weird, because early shorts were bidding it up in order to exit their positions. So there wasn't a clean flush. I covered most of my position into LOD and got out of my lotto shares when it refused to make a lower low.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2015-04-16 11:17:41 | VLTC | sell | $8.950 | short |
| 2015-04-16 11:36:26 | VLTC | buy | $8.660 | short |
| 2015-04-16 11:39:37 | VLTC | sell | $8.600 | short |
| 2015-04-16 11:41:46 | VLTC | buy | $8.500 | short |
| 2015-04-16 11:44:59 | VLTC | sell | $8.550 | short |
| 2015-04-16 11:54:11 | VLTC | buy | $8.400 | short |
| 2015-04-16 12:01:08 | VLTC | buy | $8.150 | short |
| 2015-04-16 12:09:58 | VLTC | buy | $8.280 | short |
| 2015-04-16 12:14:20 | VLTC | sell | $8.330 | short |
| 2015-04-16 12:55:24 | VLTC | buy | $8.240 | 0 |
Comments
ToqueX
And as you say above, you shorted the third spike at the previous day's resistance. So the spikes would show that it's having trouble breaking through that resistance and the third one would give the most probability of a successful short.
foldelinio_BOWS
Well, I'd start a little earlier with the analysis. I have to add that information later on, but for now, I'll just explain. $VLTC is basically a piece of junk. However, Carl Icahn related rumors (he doubled down on a stock that he bought, because his son talked him into it), sent it on a multi day rip.
On the 15th we had kind of a blow off top into 10$. Lots of volume from 8.50$ to 9.80$ another spike from 8.50$ to 9.50$ then a flush into 8$
The stock is trading on the backside of its upmove, because it is the first time, that you see the volume pattern flipping. First it was volume up on upmoves now it's volume up on downmoves.
It is a bit problematic, however. Since this stock is supposed to be trash, there are a lot of early shorts trapped in their positions just waiting for it to go back to 5$. And those guys have their limit orders below every low, in this case in the .60s, .40s, .20s and at 8$.
You cannot short the breaks, since everytime you pull the trigger on a break, there is a guy 1 - 2 cents below you waiting for his fill on 5k shares. And every limit order is a potential bounce level. You know, the dude is posting size, gets hit but just for 2000 shares and some 100 share blocks. Suddenly everyone knows, that it's a dead end and starts taking offers.
That's what happened at 8$
So if you want to short a stock like this, you HAVE to sell spikes into resistance zones with stops above resistance. Between 9$ and 9.50$ there are still a lot of longs trapped, which should protect the position a little. Selling spikes means selling into the shorts covering their positions in panic, especially in this situation.
I don't like trades like these. They are crowded and overly complicated. It's just that R/R was quite ok and I looked at it at the right time. I would never focus on trading stuff like this on a daily basis.
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Great entry. How did you know not to get in a few candles earlier? Is it because you were waiting for "rounding action" and you also wanted to sell into a spike? I see that 5 candles earlier there was a spike, but no rounding action yet on the 5m chart. Then the next candle shows the rouding action, but the wick points downward. My entries have been really bad lately, so I'm trying to sort out the fine nuances of it and what you've got built into your intuition to be able to get a great entry like this. Any insight would be great.