Shared by
BanalityOfEvil
PLAY
COSM – Halt Resumption Scalps - Broken Slot Machine
CATALYST
COSM is going parabolic after its reverse stock split. Volume is heavy and chart is moving in a bizarrely smooth upward curve. When will the piggy pop?
TRADE IDEA
COSM could continue up to $20 by market close per daily chart
SETUP QUALITY
C – I don’t like trading reverse stock splits because usually they’re usually slow. This chart and price action is extremely clean and seems too good to avoid.
Could be extended, need to reduce size
BIG PICTURE
The major indexes have sold off 4 days in a row due to FED announcements, nearing long term support today, a bounce in the market is possible. There were no clean gappers and I was not planning on taking any equity trades long today.
The stock was recently flagged for not meeting its listing requirements, which is why the company issued a reverse split.
COSM keeps bidding up, false halting and halting, the level 2 is very clean. Algos seem light. Maybe this is how level 2 looks when there are no algos involved.
• Low Float 55.94M
• Reverse stock split – Nasdaq deficient
• RVOL showing 1.5% on trade ideas, but this is obviously incorrect and appears to be based off short-term volume calculation. The daily volume at time of trading this is already over 100M
• Fresh News
• Abnormal price action… just keeps bidding up**
PLAN
• Trade with very small size, no need to take a large loss on this; price is way extended.
• Wait for a pullback or false halt to get long very small size, look to enter and exit around nice round numbers if possible… this could get messy
• If the 1st trade does not work, then just leave it alone
• Attempt to bid into position and offer up on sharp up moves. Rinse and repeat until the pig rolls over.
REASONS TO SELL
• Stopped out after one attempt
• Spread gets wide
• Volume starts to drop off
• Tape slows
• Large offer appears
• Price touches $20
EXECUTIONS AND PRICE ACTION
@3:37 bid for small size at 15
@3:38 offered 100% at 16
@3:41 bid for 17 after a false halt down
@3:42 offered 100% at 18
@3:43 bid for 18
@3:44 offered 100% at 19.50
KEY TAKEAWAYS
Got some wild fills
Stock was clearly broken and continued to offer opportunity
If I see this type of broken slot machine, I will try to jump on it earlier in the day. Keeping in mind that it could be exhausting to scalp in and out this for an extended period, and it is necessary to trade with responsible size.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2022-12-16 15:37:46 | COSM | buy | $15.430 | long |
| 2022-12-16 15:38:36 | COSM | sell | $16.340 | 0 |
| 2022-12-16 15:41:19 | COSM | buy | $17.550 | long |
| 2022-12-16 15:42:12 | COSM | sell | $17.910 | 0 |
| 2022-12-16 15:43:39 | COSM | buy | $18.680 | long |
| 2022-12-16 15:44:30 | COSM | sell | $19.240 | 0 |
Comments
BanalityOfEvil
Hey Andy thanks. That’s hilarious people were saying that. I was definitely thinking about Lances video before taking the trades. I think he might have talked about it on Chat With Traders too. Unfortunately I did not record this one.
AndyBhanver3
Yeah! Haha, when I read your notes, I was like man he was right on spot with that haha and yeah, Lance has spoken about the broken slot machine on chat with traders, SMB YouTube and twitter. Thanks for sharing this and how you traded it! No worries about the recording banality and again thanks for sharing!
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Nice catch banality, missed this one until later, saw it all over twitter around power hour and market close, read up on it as well as Lance had posted about it and many people were saying this was the broken slot machine here haha, what a trade to put in for the books and reviews! Do you have a recording on the tape and level 2 by chance? If not no worries, probably will use TD to go back but probably won't be as clean in real time. Again, nice catch here banality!