The bitcoin mania is not just having an effect in the cryptocurrency space. Equities that PR anything to do with blockchain, Bitcoin, or cryptocurrencies in general, have had some incredible momentum lately. This momentum hasn’t just lasted a couple days in these stocks, but for weeks. So what can you do to capitalize on the cryptocurrency mania in the equities sector?
LFIN: Once In A Life Time Move
LFIN made one of the craziest moves I’ve seen in my career. When you combine a low float, thin, 4 day old IPO stock with a cryptocurrency catalyst you were always going to expect a decent size move. No one knew that it would go to 142 per share in 2 hours. Check out this article to learn more about how to play IPO breakouts so you can capitalize on these plays in the future. LFIN is a perfect example of an IPO breakout with the all the factors for a perfect storm. For more on our LFIN trade check out this video:
These Stocks Hold Their Gains
RIOT, LFIN, and many other companies running on a crypto related catalyst are all companies with terrible fundamentals. Despite this, most of these stocks have been going on multi week runs. Shorting these stocks is just as dangerous as shorting cryptocurrencies at the moment.
If you're getting long these, you should always leave some shares for the home run trade. These seem to always run further than you think possible. Just keep in mind that when stocks make a ridiculous move like LFIN that there is always a halt risk (why I sold my shares so early).
Pay Attention To Relative Strength/Weakness in These Names
All of the blockchain stocks tend to trend with each other. When LFIN breaks out, RIOT and OSTK will often show strength as well. XNET for a while was trending with these stocks as well. However in the past week, it has shown some major relative weakness to these other names. This an example of relative weakness. XNET has been acting weak while the other blockchain stocks have been acting strong and breaking out to new highs. When you see this kind of relative weakness it is a major sell signal. It's important to pay attention to relative strength and weaknesses in these kind of major sector trends.
We teacher our students how to trade these type of plays in our 60 day bootcamp. To claim your seat for our next start date please email Maribeth@bullson.ws.