Trade Review BIOF "How to Play Sympathy Plays"

Here is a trade review on BIOF from Mid November.  A few of the members had asked me about his as we bought the stock without technical confirmation.  In a trade like this is true often we anticipate the breakout due to the “sympathy play”  Sympathy plays are essentially  a play where  a stock in a sector has a huge run off earnings, news, etc.  Often on that 1st play traders will pile in and push up the stock.  What tends to happen is the momo in that stock will spill over into stocks in the sector as traders take profits in the original and reallocate capital into something new. Also traders who missed the 1st play are feeling the itch to get in the momentum and are hoping that they can find a stock that will do just the same.  This tends to lift many of the stocks in that sector especially if there is a similiar company with a similiar price point ie if its a 1.00 stock or 2 dollar stock.

Biof we added the day that peix started its big move we added at .57.  The next day we doubled up the stock when it started to break technical levels at .61s.  This stock ran to 1.20 in just a couple days.  We ended up selling our last  1/2 shares for 80% gain at 1.05.  Since we had full positions I scaled out at .65, .70 and 1.05.   I could have milked a lot more profits on this trade if i had let it run a bit as the volume was coming in huge but I was on the road in chicago trading from my phone! so i give myself a b+ on the trade.


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2 thoughts on “Trade Review BIOF "How to Play Sympathy Plays"”

  1. Wow! BIOF played out REALLY nice, you called it just like it played out. Great decision on doubling up when it broke out from the flag. Were you hesitant that it would’ve met some resistance and possibly scaled down below your buy-in price point? A risky move, but you stuck to your own strategy and came up big time. Awesome, and great explanation by the way!

  2. thats ok to anticpate as long as your risk is defined. As a trader confirming your trades is not neccessary if the probability of the trade is very high. As long as your managing risk correctly you can be anticipatory


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