To repeat -at our website we are trying to show people that a small account should not be an impediment, so we’re trading with that mentality ourselves. I traded AEZS today 1.74-2.01, broker confirms. From our premarket comments – AEZS, MYSZ, XGTI, ALSK – obviously AEZS the huge winner today. Two days in a row the top stock was in premarket comments – yesterday CAPR. In this business, it’s nice when the hard work has good results.
I’ve cut way back on my trading. Just being extremely selective – 2 trades last week, 2 so far this week. Only 1 trade today. Remember – holding the morning lows is very important for momo stocks. With the total piece of crap stocks, which are often the best daytraders, I want to see the low of the gap up hold first, before considering going long.
Couple question on low float.
A) What’s the rationale for choosing low float stocks for momentum trade?
B) How do you define low float.Do you have any specific number(s) in mind?
A) Actually it’s low float stocks which become the huge momentum trades. so it’s another part of the non-chart work -checking/figuring the float, plus the daily volume.
B) I’m doing a post on that one Raphael – good questions.
Low float is where the volatility comes from. So looking at that, along with average volume, and take into account a spike in volume with the rush of excitement, then you can get the huge turnover in volume relative to the float. For instance, CAPR from Tuesday – 10 million shares float, but traded 32 million volume. Now you see what can happen. My view is that we need the volatility for the opportunities.
I’ll do more #s, but the float is the total # of shares which the public can access to trade – meaning the total shares outstanding minus the restricted stock (for management, etc.). And then you have the tricky float (which gets right back to what we’ve been learning) which is the shares held by the strong hands. So you see the float can be quite tricky, but this is why all of these tools need to work together, not separately.
Can a low float low volume Ag stock like TNH have potential?
That thing is really low float, and the float as % of total outstanding is around 25%, which is very low also. Insiders own 75%. There are not a lot of shares out there, however – market cap is the thing. There’s a big difference between a $2 stock with 5 million sh. vs $87 stock with 5 mill sh. You’re just not going to get all of the little accounts after this thing. Those are the ones who really carry these – if you can look at all of the 100 share trades that go thru a $2 stock. it’s pretty wild to watch it. They can’t buy a TNH.
Its baffling how those high dividend insider stocks can tank.