![]() It’s a decently hot sector … but the reason it keeps spiking is because shorts keep trying to guess the top. And luckily, short squeezes only add to my profit potential. It’s an extremely dangerous situation for short sellers. That forces short sellers to buy-to-cover and creates bullish momentum. That increases the possibility a broker will ask for the borrowed shares back… More short sellers can create a share deficit. An obvious strategy is to short the stock after it spikes and wait for lower prices.īut as I mentioned, that strategy got overcrowded a few years ago.Īnd it created what’s known as the short squeeze. We can profit on the way up, but every savvy trader knows the price will eventually crash back down. The companies are sketchy and the spikes are usually overrated and based on hype. That was years ago … before it became the obvious strategy. My first July stock pick is The Metals Company Inc. (NASDAQ: TMC) - The Short Squeeze Penny Stock Let’s dive into the hottest plays this month … #1: The Metals Company Inc. They account for failed trades because any trade can fail.Īll of this bullish momentum is great for our niche, but remember to keep your expectations in check. The patterns we use have clear risk levels built in. I get in, ride the momentum, and get out for a quick profit.Īgain I say wait for the chart to set up. I wait until the chart checks off all the factors and then trade like a sniper. The difference is, my strategy takes a degree of patience. Instead of guessing where prices will go next, I wait for the stock to set up and show me. I find the ‘reacting’ business is much more lucrative. That’s why I stay out of the ‘predicting’ business… And no one could have predicted this rally at the beginning of 2023. It’s at 52-week highs, and recovering more every day.Īll the momentum is great for traders like us. ![]()
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