The back-story: Last Thursday, Pareteum Corp. was notified by NYSE MKT that its stock would be delisted if it didn’t step up to meet compliance standards. On Friday, July 14, the company announced that it had meet certain standards and that the exchange had given it an extension until late November to meet the rest.
The down-and-up news was coupled with a good daily chart. Pareteum was set up for a gap-fill-and-go play; the stock had been hot, re-traced all the way back on Thursday, and now had good news.
My play: I averaged into TEUM at $1.39 on Friday, buying a total of 5,000 shares.
With the weekend coming, however, I had to decide whether to hold the stock; the technical set-up showed me there was room to run and I have learned that when small-cap companies are struggling and trying to maintain their position, they often put out some positive public relations to move past the bad news. Management wasn’t going to want people thinking the stock might wind up on the gray or pink sheets; even fluffy news can work at a time like this.
How it played out: Pre-market on Monday, the company issued a press release about having received the 2017 Communications Solutions Product of the Year Award for its Mobile Networking Software and Services by TMC, a global integrated media company.
Who cares? The market did.
The stock moved as I had expected, eventually hitting a pre-market high of $1.82. I sold my stake at $1.68.
The lessons: First off, Pareteum showed why I want two good reasons to hold a moving stock through the weekend. Yes, the chart was good, but the set-up for pr was perfect; it was an additional reason to be confident.
Some traders would be frustrated at missing the $1.82 high, hanging on to catch the exact top. I’m not trying for perfection when the market hands me a bag of money; if I had held Pareteum through the market open, I would have wiped out my gains and then some. When you make a good call, be happy that it turned out, rather than frustrated that it might have turned out better.
Taylor Conway is the lead day trader at PennyPro.com. He is a short-term day trader of stocks and ETFs. Prior to Friday, he had never before traded Pareteum Corp.; at the time this article was published on RagingBull.com, he had no shares, options or open orders in TEUM.