When shorting a momentum stock, I have found that the best short opportunities come late day around 1 pm.  Just like we look for intraday breaks and end of day runners for longs around this time, we can also look for parabolic shorts on the intraday charts.  When you find a “holy grail” intraday chart, meaning the stock has established an uptrend all day, then you wait for the trend to break towards the late afternoon and thats where you hammer the short. The most common short that I have observed to be working is the intraday break of the 20dma after the stock has been riding it up all day. Just an observation of the past few days, that I thought I would share. Pretty simple and basic observation, but makes for big money and I like that combination! Heres an example of my mistake today, and where I should have actually taken the short instead.

I shorted the stock here in the morning 5.3 or so.. my initial thought process was: the stock closed really weak yesterday and now should move green to red after this morning bounce.. well i was stubborn and didn’t wait for the stock to move red and instead shorted early thinking I could catch a few extra gains. Wrong.. ended up stopping out for 40 cent loss..

The way this stock should have actually been traded: Short the stock if indeed it had broken that 5 level and gone red or wait for 1pm and short when the 20dma trend broke right here at 5.93 and taken the 30 cents out of the short..

this list is hot one of the best ive had for a while.  hit up maribeth@bullson.ws or the bengalitiger@bullson.ws if you got any questions.  if you still cant figure it out that means you need to get in my chatroom as i teach all day to my guys!  have fun tomorrow.  lot of good setups abound. 

@SzAMAN is in charge tomorrow…..u guys will do fine. big willy will most likey call the plays as th5ats just what she does.  have fun tomorrow!  its a bull market you will all be fine tomorrow but just remember if the nasdaq is up 13% this year…if ur trading less then a few mill you should be up 2-6x that.  have fun boys and girls let m know if you need anything. kunal@bullson.ws

premium members ill get you a special list with a few of my favs in the a.m before i head out! p.s. im gonna be a sheep tomorrow for mardi gras!  SHEEP-LESS IN SEATTLE !!!!!!!!!!!!!!!

Same scenario a few months ago with Tim tebow. Every news channel and every gossip magazine all of a sudden had Tim Tebow’s face plastered all over it, with tebow nation and tebowing becoming household words. And here I was making sure i tuned in to watch the broncos play every week, not the patriots or the cowboys, but the broncos??

Jeremy Lin lost his game Friday night and Tim tebow lost in the second round of the playoffs.. But who cares about that..  Their success has nothing do with whether they win every game, but has everything to do with how they never stopped believing in themselves and never stopped working to achieve their dreams. The thing that these two guys have in common is that they both were given a chance to come off the bench and replace an injured teammate and make a name for themselves, and they both rose to the occasion. They didn’t win every game, but they won when they weren’t supposed to, and they won thanks to sheer will power and hard work. That’s what got my attention and that’s what has the whole world talking about these two guys.

                 

I was looking at the stats of the trades last year that we took in the boom room. We keep a spreadsheet of them to see what the percentages of our picks are winners vs losers. Around 75% of the stocks are winners. Thats actually a HUGE number.  When I first started trading, I remember Kunal told me that @johnwelshtrades bats like 50% on his trades, yet the dude is a millionaire from trading.  Your not gonna pick a winning trade every time. That’s impossible and not the point. There will be plenty of losing trades and it’s part of the job. Being a successful trader is about learning when to be aggressive and make your money and when to scale back and conserve your money.  Successful traders are great risk managers. We take trades that place us in great risk to reward situations. Successful trading is about learning a system that works for you and mimicking that system over and over again.  At bulls on wallstreet we teach a handful of setups that we have found to be the highest probability trades and we trade those same patterns over and over again. That’s what works for us. Find your niche’ and start learning it backwards and forwards.

The point of this blog is to encourage you to take your future in your own hands.. Now is the time to learn this stuff and to make a name for yourself. Two years ago I basically had no idea what the stock market even was. Thanks to a heck of alot of hardwork and bullsonwallstreet, I now successfully do this for living and love every minute of it.  The resources are there for you, there’s no execuses why you can’t be successful in this bussiness. So get off the bench, put in the work, and become the trader you want to be. The statistics say that 90% of daytraders fail… But the statistics also said that Chinese guys less than 8 feet tall don’t make it in the NBA, and baseball-throwing quarterbacks don’t start in the NFL.. At least that’s what everyone thought. Make 2012 your year.. put in the work and defy the odds.

“It’s not the dreamers that are remembered, it’s the doers. Just having a dream doesn’t mean much if you don’t start at it. You have to take action. Everyday try to do something to get better”- Tim Tebow

Price:  Not just todays price but the context of it compared with the previous days, weeks, months.   Often when looking at a stock coming out of range where you see a character change in the way price shows/action it can signal a trend change or a shift in expectations. If you can clear a key level of supply in a stock and it starts to show a change in character in the stock (larger candles, increased velocity etc) This can start potentially a multimonth run.

Volume: Above average volume tells you there is an expansion in  interest in the stock. Its not an absolute volume number that matters but a relative manner.  I like to use a 50 day moving average on my volume study.  So then what im looking for is an expansion of volume or expanding volume in  a relative fashion.   It doesnt matter if its 100,000 shares a day or 100 million.  If  a stock trades 100k a day and in the first hour of the trading day we see 200k shares traded then we potentially have something special cooking as we have 2x of its daily avg in volume and its come in the first hour of the day.

Look at FFN.  We have traded this 5 different times since Decemeber for 10-80% gains each time.  The clue that things were changing for it was the volume expansion.  This signaled a shift in the stock that provided the fuel for a  huge run.  Now its 2.35 and everyone wants it!

FLOAT:  

(from investopedia)

Definition of ‘Float’

1. The total number of shares publicly owned and available for trading. The float is calculated by subtracting restricted shares from outstanding shares.

For example, a company may have 10 million outstanding shares, but only seven million are trading on the stock market. Therefore, this company’s float would be seven million.

Read more: http://www.investopedia.com/terms/f/float.asp#ixzz1mmuJLOd3

Why is this important?  Supply and demand!  When you have less supply with an increasing demand for shares this can cause a stock to go exponential.

Last year we bought JVA at 8.00.  This stock after an slight earnings beat ran from 8 dollars to 30

See how low that float is!! Now look at the Chart for JVA the first day of that breakout the volume is 5.5 million shares but the float is only 6 million! So every share available basically changed hands.  So why does this make the stock go up….well think.  Say you own 5000 shares of JVA and you know that they just had an earnings beat and see the price start spiking up.   You own this stock at 7.00 but its at 9.50 and you see the buyers start coming in.  Well if you planned on selling your stock at 9.50 and you know there are so many buyers stil coming in at 9.40 why would you want to sell it at 9.50 so then you hold your stock till someone raises the bid…and then raises the bid and then raises the bid to a level where someone is finally willing to give up there shares.  When trading momentum stocks this is huge as that increase in demand  just slightly can tip the balance and make a stock go exponential.  Imagine on JVA between twitter, facebook, funds everyone that saw the earnings.  1000 of those people wanted to buy 1000 shares well thats 1milllion shares of 20% of the float that now needs or wants shares.  This is when the booooom booom comes in.

Stocks with floats over 1billion tend to have choppy breakouts. They often will breakout and then retest.  I usually will buy dips on stocks with big floats.

Stocks with floats under 100million often will breakout and never look back.

If you look at the run in NFLX these last couple years. Everyone knew that nflx was overvalued but when  momentum took place after some earnings beats and then you couple that with a 50million float you get  huge run.  

THE SURPRISE:  This can often be a pr or an earnings beat.  Anything that was not expected…when these instances happen this can shift the expectation of the stock and start a whole new trend for a stock.  This does not have to be a news driven event even a stock breaking out of long consolidation period can change the outlook on the stock as it has now brought in the trend traders.  Often stocks that are dormant for months  can be shaken out of that neutrality with this type of surprise and now all of the sudden you have a stage 2 uptrend.  

This can come from a few different areas.  

News

Pr

Earnings

Sector Strength/Sector news

This works as the stock has to be revalued.  Look at stocks that we trade over and over the past 2 weeks like IPSU.  IPSU was a dead stock for months upon months.  Then bam when it had earnings that “surprised” it started a huge run. We traded that stock on earnings day, the next day on red/green, then later that same day for intraday breakout.  WE took 10% gains on all those as that surprise brought in volume, momentum, and started a new trend.

FFN: same thing. I added this at .55 cents on its first run selling it in the .8s for 50% plus gain.  Then when the sector hit on fire I added this in the .9s and at .98 again selling in the 1.2s. Then we preceded to rebuy it at 1.28 and sold our last shares in the 2.3s for a near 100% gain.  Once that shift comes in its boom boom time.

and remember the characteristics of a bull market

Low volatility

Grind type action a lot of .5% updays. Dips get bought quickly and then u just grind it higher..makes you think market is stalling but this action is typical 

The dips tend to be much shallower then you think. Everytime you think a tank is coming you drop then recover a few days later

Stocks will look very extended 

Momo/ Growth stocks rule 

There will be sector rotaton as people pile into the non extended sectors ..trader will get into anything that seems like its lagging after big runs

As of right now there are no signs of distribution

This type of action will be seen till we break below the 50dma on the indices

______________________

try not to get caught in the hoopla…all you need is 1-2 good trades a day to make income.  Just stay out of the bad ones!

We added on two swingtrades in the boom room today, and I have great expectations for both of them. Here is a look at their charts and where we entered them.

The first swingtrade that we added on today was ZOLT. Zolt broke out really hard on earnings on huge volume two weeks ago. Since that breakout the stock has pulled back 3 bucks on much lighter sell volume. The stock was flagging and continued to get tighter and tigher the last few days, alerting us that it ws getting ready for a move. We added this thing in the room in the 12.5′s today. I have targets of 14 on this bad boy. The stock closed at 12.86 today.

The second stock that we put on for a swingtrade today was MPEL.. the stock brokeout right before the close today and we added it at 12.25 for a swingtrade. The volume on the breakout was really good, so I expect this one to run tomorrow. The 12.25 spot was crucial because the stock tapped that area 3 times before finally breaking. The more times a stock taps an area and fails, the more powerful the breakout will be once it finally breaks.

Here is a list of stocks that I have on my radar for tomorrow.

GERN- break of 2.2 sets this one off

FCF-  breakout is at 6.04

NEP- stock is flagging, watching for a break of the flag

MNTX- breakout at 6.35

MOBI- stock is flagging, break  of 4.9 might do it

I go home today with mostly cash and will be looking to deploy some swings if we can pullback further…in the shorterm I will be daytrading.

Another killer day in the chatroom we nailed this trade in the morning getting in at 4.15 right before the explosion…..  then the bengali tiger put the alert out on $velt on that 10 dollar cross which ran right to 11.00 with barely any shake. We followed up that with some nice trades in $dang $mill and took a 10% plus gain in $mvis.  Overall pretty solid day…still holding $vog which is a dog down 14 cents, $cedc, and $renn.  Amazing market we are in

A lot of you guys have sent me emails on our BULLS PRO  membership. Hit that link for information.  It also gets you free access to our site so if your on a budget and need a broker that is the best way to go and be apart of our community.    

All in all we had one of our best weeks ever in the chatroom with 2-3 10% plus daytrades every day of the week. IPSU, MOBI, FFN, HSOL, QPSA, STP, MOTR, DQ, CLSN, OXGN, ZOLT, GNOM were all 10% plus winners last week with some of the stocks like IPSU, FFN, DQ breaking 20% plus. Ive got a whole batch of trade reviews about to go up in our education section on the site for our premium members. Any setup that makes money ive deconstructed it for you guys. Keep studying! These videos are the secret sauce.  We have a great group here and we trade live and teach all day.  If you like trading momentum this is the best room to be in.

A lot of you guys have sent me emails on our BULLS PRO membership. Hit that link for information.  It also gets you free access to our site so if your on a budget and need a broker that is the best way to go and be apart of our community.

its open forum in our chatroom so you can bring your questions, charts, anything that you want to talk about.  Im seeing a lot of progress in the chatroom from many of you guys.  Your starting to pick up the system and the method and really locking down your trade plan.  But we still have much work to do and between this weekly study session and more webinars/videos hopefully we will all be able to accomplish our trading goals.  Its very important if you are learning or having trouble or even doing great that you take advantage of these times.  

Thursday 8PM EASTERN TIME.

@ the BOOMFACTORY.

this will be a weekly thing.  Im having it in the chatroom instead of webinar so that we can have group particpation but also so that those that are working or doing family things can still hop in from their iphones or ipads and participate.

NO EXCUSES FOLKS! i get a lot of emails from people everyday asking for help on their trades and things that happen to them. When i ask them if they watched the webinars or any of the videos they almost  always say no!  we need to be constantly learning and improving our game.