When it comes to growing a small account there’s nothing better than quick gains.
And that’s why I developed my strategy around the idea of taking quick base hits.
This simple concept has allowed me to grow my small accounts quickly.
I say accounts because I do it over and over… I start with a low dollar amount, turn it into something more meaningful, then clear it out and do it again… Rinse and Repeat
At this point you might be wondering what I mean by quick gains.
Well my goal with most trades is to get in towards the end of the day and get out the next morning.
And the best part… I’m looking for trades with 10% or more in potential return or I’m not even interested.
How is this possible?
Sit back and I’ll show you with this real-money trade I took on a breakout gap fill in GEVO just a couple days ago.
While I put this trade on towards the end of the day as usual… with the intention of holding it overnight to get into the gap.
It broke out so fast, I was pulling in 18% in just over an hour by grabbing my profits after the market closed.
How’s that for a quick profit?
Here’s how it went down.
GEVO announced a secondary public offering last Tuesday, for 30 million shares at .60 plus 30 million warrants exercisable at .60 any time in next 5 years.
At the time the outstanding shares totaled around 14.45 million, so we are looking at a pretty big case of dilution here.
So with the stock trading around $1, it quickly headed south.
I mean you’re not going to want a stock at $1 if they are about to issue twice as many shares as are currently outstanding at half the price are you?
The next day GEVO gapped down and hit a low of .46.
A gap happens when a stock opens lower than the low or higher than the high from the previous day, creating space between the bars on the chart.
A gap fill is when the price of the stock trades back through the gap closing the space on the chart.
Often when a gap forms, it’s like a void without any specific support or resistance. So when a stock can break into it, there is potential to trade through it.
Look at the chart below… you’ll see the gap in GEVO creating from the offering.
And notice how much space there is… if GEVO was to fill the gap, it would need to move up over 40%… that’s potential I’m seeing.
And we didn’t have to wait long to see GEVO enter the gap…
The offering closed this past Monday July 6th and the stock traded up on heavy volume as it broke into the gap.
Which is my buy entry… but not immediately. I needed to cross a few things off my list first.
As mentioned, I aim to enter a stock towards the end of the day with the idea to hold it overnight and let the momentum carry it up into the morning… which is when I look to capitalize on the move.
GEVO hit my end of day scan Monday afternoon due to the increased daily volume and the big move up.
This is exactly what I want to see… heavy demand pushing a stock up.
But not just in the morning. I need to see it continue into the afternoon… This ups the odds of the momentum pushing the stock up the next morning on the built up order flow overnight.
Looking at the 15 min intraday chart below, you will notice GEVO trends up nicely all day… after gapping up a little in the morning, so it’s looking nicely bullish already…
So when I see volume pick up as it trades near the highs going into the close, I know this is a stock I want to be in.
So I send out my trade alert and enter at .625.
But GEVO was trading really hot, so I didn’t even have to wait till the next morning to hit my mid-70s target…
I was able to grab a clean 18% just little over an hour later in the after market trading session.
Sure I could have held it until the morning… clearly the momentum was in my favor.
But this was one time I was ready to lock in a profit and clear my account for the next trade.
Keep in mind the recent offering at .60, so I felt great with 18% in hand, not knowing what lies ahead from here.
The trade worked, just quicker than expected… so why push it.
As you can see below the momentum did carry through into the morning session as GEVO actually filled the whole gap… so I left some on the table.
But that’s actually something I’m more than happy to do with any solid trade I take. I’m not going to be greedy… that’s when you start to lose.
Stick to my bread and butter trades and pull in base hits… over and over.
Looking at the trade above, you probably see it’s not rocket science.
But it does take patience, practice, and of course education of…
So if you are ready to start learning how I am doing this in my own accounts and finding trades each day, check out my FREE Stock Trading Starter Pack… and you’ll be on your way.
Genius Brands announced last Thursday that they would host a conference call on Monday to discuss an “exciting business development.”
Keeping it pretty vague there. And why did we even need to know about it on Thursday if they weren’t giving any details until Monday?
Sounds like a classic PR hype play…
The news might be legit, but it could be they know the announcement isn’t so “exciting” and without any detail we can only speculate…
And that’s what traders did on Thursday as they bought the stock up on the rumor of an “exciting business development.”
But as you can see in the chart traders may have bought the rumor, but they also sold the news sending the stock crashing back down on Monday.
To see how it all played out I’m going to walk you through the details of the GNUS hype machine, so you can see what really happened… and the step by step of how to trade it.
First let’s just look at the price action in GNUS stock over the past month.
There’s a lot going on in that chart.
GNUS recently launched their “Kartoon Channel,” a network of children’s programming focused on “content with purpose.” And it was launched at the perfect time with kids stuck at home due to the pandemic, just what every parent needed… and the stock took off.
It didn’t take long for the stock to fall right back to earth where it was sitting around $2 last Wednesday.
Now let’s look at last Thursday when the CEO announced that the company would hold a conference call Monday morning to discuss an “exciting business development.”
First off, it’s sketchy because of a lack of details. But you don’t need to be concerned about that, we are trading not investing.
So regardless of seeing through the CEO’s thinly veiled attempt to hype the stock, this is still a catalyst potential for a stock like this.
Given that we now have a catalyst, we just need to look at the chart and look for opportunity.
Now focus on the morning price action. GNUS gapped above the 200 day that morning (the green line on chart).
It then trades in a consolidation range for the first hour or two as it builds up the energy for a breakout. This you can see in the trading range marked between the two blue lines.
If I am looking for a buy setup. I would have one as the stock trades out of the morning consolidation with an increase in volume.
This is really as clean as it gets out there… a catalyst, a gap up, the stock holds the gap and the 200 day sma, then breaks out of the morning consolidation with volume ramping up.
This was a slow setup with plenty of time to catch that break… as traders entered the rumor play, the stock broke out and as volume picked up and it’s off to the races.
But now we have to wait until after the long weekend to see what the “exciting development” actually is, which poses a natural question… should we even be in it after that move up?
Yes and no… With a quick return like that, there is no reason you need to be in this stock over the long weekend. Take your gains.
But if you are playing all the way through, you could hold it until the conference or just before.
Who knows, if the news ends up being huge, the stock squeezes the massive number of shorts out and jumps to $10.
That didn’t happen but it very well could have if you remember the daily chart up above.
Come Monday morning we get a press release along with a live conference call to talk about it…
Genius Brands entered into a joint venture with Stan Lee’s POW! Entertainment to create STAN LEE UNIVERSE. And Genius will be the managing and controlling partner of the venture.
Just seeing the name Stan Lee is enough to perk me up…
But what is this STAN LEE UNIVERSE?
This is where it gets interesting…
The joint venture “will assume worldwide rights, in perpetuity, to the name, physical likeness, physical signature, live and animated motion picture, television, online, digital, publishing, theme park, comic book, merchandising and licensing rights to Stan Lee and his IP creations past*, present, and going forward.”
So everything that Stan Lee created that has basically not been made a success thus far is now under their control…
If you don’t know Stan Lee… just think Spider Man or simply go to the Avengers and you have a big list of huge hits… with billions in value as a Disney asset.
So yeah he’s a big deal.
Enough so to think that even these previously unused characters would likely have some sort of value. Granted this is a children’s programming company, so it’s unclear where this is headed and if it’s really that big.
And is the news big enough to sustain the stock’s rumor spike from last Thursday?
Let’s go to the chart:
Not so great.
News doesn’t always make a stock go down… but in this case we ended up with traders grabbing a quick profit and selling the news to the late comers.
Two things to note about this conference call.
One, there was already news about Stan Lee products. GNUS had previously released news about a program called Stan Lee’s Superhero Kindergarten with Arnold Schwarzenegger as lead.
So it’s not likely that this was super fresh news. Even if it was only recently inked.
And two, there weren’t a lot of details when it comes to the numbers.
Joint ventures can mean a lot of things and they really didn’t talk about any of it.
Investors will want some clarification on the level of profit sharing and what it cost to make this happen.
And with the massive short interest (38% short float) in GNUS, there are a lot of people betting against the stock and trying to keep it stock down.
So does it all amount to nothing?
Long term, who knows… but for the moment, the market isn’t buying.
If you look at where GNUS traded to… it went right back to the 200 day sma, only to gap down this morning in what would amount to a major beating for anyone that bought the news yesterday.
There you have it… while the “exciting business development” wasn’t so exciting to the stock price, there was an easy trade on the rumor Thursday.
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There’s a shift towards sustainability… it’s not new by any means, but related stocks are starting to perk up in a big way.
And that’s all that matters when it comes to trading.
Sustainability has been a buzz word for a long time now, we all know that.
Heck on the investment side, there have been some huge gains over the years.
But for traders, we need something more than a slow long term move… we need volume and action.
And right now things are really picking up in the sustainable energy industry.
TSLA may be the Big Dog we all know and love. With every passing day TSLA has become a more viable option when searching for a new car… and the stock has been soaring.
So what if you missed TSLA?
Well that’s feeding the frenzy for every little company that “could” be the next thing in the industry.
We just witnessed NKLA rocket on its IPO to pass Ford in market cap, and it has yet to make a sale.
So if you want to see some of the stocks making crazy moves right now, look no further…
I’ve lined up 4 hot sustainable energy stocks that are making moves today…
Plug Power Inc. provides hydrogen fuel cell solutions for the electric mobility and stationary power markets.
PLUG’s technology touches everything in the hydrogen realm from powering material handlers, providing backup power, dispensing and refueling, Robotics and Aviation… to maintenance and tech support.
Let’s go to the chart.
PLUG broke out of a nice consolidation base June 4th setting off the big move higher.
The recent extension came on the heels of an acquisition with PLUG raising its long term revenue target based on the deal.
And at the same time, PLUG benefited from a price target hike to $14 on June 24th.
Then just yesterday J.P. Morgan raised their target to $8.50 yesterday adding fuel to the continued push higher today.
With the consolidation breakout leading into a flag pattern and breakout, you have to admire that chart for a second before moving on…
It’s always helpful to study the patterns you trade whether it’s happening now or you already missed it… learn before you earn.
Workhorse is a technology company focused on providing drone-integrated electric vehicles to the last-mile delivery sector. We’re talking about battery-electric delivery vans, drones, and of course telematics performance monitoring systems that are fully integrated with the vehicles (real time monitoring and stats).
Major Catalysts: They have been working with UPS for years now, testing their drones and UPS has already ordered and worked with their vans. And UPS will be making more decisions on fleet changes later this year, so that’s a potential future catalyst depending on the decisions made.
Just today a BTIG analyst upped his price target to $26 citing a “first mover” advantage from the earlier UPS van order.
Lots of potential in the field and with that lots of speculation. Always trade your setups and follow your plan.
Blink operates in the EV charging station arena by partnering with businesses & property owners to install Blink’s EV charging stations at their location. Instead of buying the charging station Blink will instal it, own it, and operate it for them… sharing a portion of the revenue with the property owners.
I can’t help but picture a vending machine operator when I read that. But to fit the needs of any business, Blink actually offers multiple business models including joint operation and ownership… or outright ownership with tech support etc.
The Blink network currently connects more than 23,000 charging stations across the United States.
And lastly for today, Bloom Energy (BE). Their mission is to make clean, reliable energy affordable for everyone in the world.
I like the sound of that. But what’s the reality it’s coming from BE?
The company has a server that delivers clean, always-on electric power by converting fuel into electricity through an electrochemical process without combustion.
Designed for modularity—they can be clustered together in various configurations to form solutions from hundreds of kilowatts to many tens of megawatts fitting the needs of pretty much any company out there.
So what’s got BE popping lately?
Here’s a snippet of a company press release on their website from June 29.
In it, they state that Bloom and Samsung Heavy Industries have joined a joint development agreement to realize their vision of clean power for ships by putting Bloom Energy Servers on SHI ships.
They estimate that it could grow to a 300-megawatt (MW) market annually for Bloom Energy, which is major considering that would almost double what they have accomplished to date.
And looking at the chart you can see BE popped on the news yesterday from around $8 to $11 breaking previous highs for months back.
Today we are seeing a pullback from the highs but with the 20 day above the 50 day, watch for BE to hold the support line above $8 and if it can break back above $11, the next high is $14.50.
With BE, keep in mind this is a very speculative stock. Play the price action not the long term investment potential.
Bloom has been around a long time and has yet to accomplish much of anything. It’s a penny stock for a reason.
And when it comes to these 4 stocks, BE is probably the least exciting to me personally.
But I’m no industry expert and it’s not about my personal excitement for a product…
So while I might like a product of one company better than another. I’m going to trade the stock that gives me my setups.
All 4 of these stocks can make great additions to your watchlist as there is a lot of excitement around this industry…
And that’s leading to some powerful moves in these stocks and others…
To learn more about trading and how I approach the market…