Weird times we’re living through at the moment…
You see, strong small-cap action is usually a by-product of strong markets – it is only when people are comfortable with their finances and portfolios, that they’d gamble money on high-risk/high-reward small-cap trades.
And needless to say, when the market is as choppy as it has been, the general populace is anything BUT comfortable.
Yet, small-cap names are seeing as good an action as ever!
Counterintuitive as it may be, for us, professional short-term traders, this is great news – such volatility is exactly the environment we thrive in.
Seeing small-cap momentum pick up only meant one thing to Jason Bond – it was time to dust off his small-cap playbooks.
And boy did his favorite setup deliver again!
Fish Hook Basics
A fish hook is one of Jason Bond’s favorite and even “classic” patterns.
It occurs when a large wave of emotional panic selling drives the stock very far into the oversold territory.
Eventually, sellers dry up, and buyers and short covers get to work, allowing for a quick upside.
The up move may only be a fraction of the preceding down move, yet it still allows for a sizable gain if entered correctly.
As you figured, the name comes from the physical shape – the anticipated move looks quite literally like a Fish Hook:
Hence, you can imagine Jason’s excitement when we saw a great fisk-hook candidate pop up on his scanner this morning.
VEON is the owner of one of Russia’s largest mobile networks – consider it the Verizon of Russia.
And, as with everything Russia these days, you can imagine it got hit quite hard… The stock lost over 80% of its value in the past few weeks.
Despite that, VEON managed to get on Jason Bond’s early movers scanner this morning, as there were signs of progress in Ukraine-Russia talks:
The fact that VEON’s CEO published a letter highlighting the company’s strong liquidity position didn’t hurt investors’ sentiment either!
So, all in all, this early morning you were getting a damaged-yet-strong company with progress on the political overhang, trading for a fraction of its value from just a few weeks ago.
This was enough to get Jason excited, but wait till you see the longer-term chart:
Does that look like a fish hook?
So, he got in slightly above the $0.40:
His plan is to let the winner ride and hold the stock until at least $0.50+.
Let’s see how it plays out for him!