It Only Takes 1 Good Trade...

What's up, everyone? All right, in
today's episode, I'm going to break down
my trades from the morning. We had a
couple of stocks today that put in some
decent moves. One of them was straight
off the watch list I uploaded over the
weekend, but a couple others were
surprise stocks that came out with news
this morning and ended up squeezing up.
RDHL was one of them. It's currently up
78% right now, down a bit off its highs.
So, this stock ended up squeezing up
over 225%
as you can see right here. This one
green candle has over 10 million shares
of volume. So, this thing basically,
like, was off to the races really fast.
The problem when that happens is that
sometimes the move is so quick that the
only way to trade it would be just to
jump in in the middle of it. And while
there was a couple, there were a couple
little opportunities, there was a spot I
was watching. I ended up
not taking it, and it ends up going
without me. So, here's the deal. RDHL
ends up popping up this morning on
breaking news. It's a biotech stock, and
they have this headline that they've
sold
divesting, you know, something that
they've owned for $18 million up front.
And the stock immediately starts surging
higher. So, I'm like, okay, there is a
catalyst. Goes a dollar 10, dips down,
rips up to a dollar 40, dollar 50. Now,
as it came up to a dollar 50 right here,
there was There was like 80,000 share
seller on the ask. And it got bought up,
but I was like, "Yikes."
Someone is excited to sell. Whether it's
a short seller or someone who's been in
for a long time, I don't know, but they
were within, like, 30 seconds of the
news coming out and the stock popping
up, they were selling.
So, then it goes up to a dollar 80. It
pulls back, it pops up, does a little
pull back right here to a dollar 90, and
then pushes over $2, ends up going to a
high up to 220, and then rejecting back
down and then it starts to show
weakness. We had more big sellers that
were coming out and at that point I was
like, I don't think this is going to
work. And someone asked, Ross, how is it
that a stock with a, you know, 5.9
million share float has become so
thickly traded so quickly?
So, here's the deal.
If you have a stock that's squeezing up
on breaking news and there's tons and
tons of buyers, the price will move very
quickly. If you have a stock that comes
out and it has bad news and there's tons
of sellers, the price will move very
very quickly. But in the case of
something like RDHL, news comes out, the
price squeezes up, there's lots of
buyers, and then it kind of stops going
higher. Why? Because sellers are coming
out. Now, sellers are holding it back.
And those sellers can come from a couple
different places. One, it could be
insiders with a company who want to dump
the stock. They want to get out. Number
two, it could be the company themselves
selling shares to raise money, which
we'll find out later when we get the
filing that they've performed a
secondary offering. But in real time, we
don't know that that's happening except
by interpreting maybe that that's why
there's so much selling. Number three,
of course, short selling. And naked
short selling is
not, you know, excluded. So, both legal
short selling and illegal naked short
selling, these all create more selling
pressure. And so now you have a stock
that's up 150%, whatever it is, but it's
not going higher because sellers are
holding it back. Now, buyers are
continuing to hold it up because they
like the stock, they think it has
potential to go higher, but at a certain
point those buyers give up, they bail
out, and combined with the increased
level of selling already from the from
whatever the the source is, the stock
price declines.
And so RDHL now is on the decline and no
one's going to buy it here. Now it just
looks too weak. So, short sellers kind
of win in this area because now the
pattern, if there was any bullish
pattern earlier, it's broken. Anyone who
bought and was holding and hoping it
would go to three or four dollars a
share is going to be giving up hope and
selling and the stock just ends up
fading. So, RDHL um
I didn't take a single trade on. I was
watching it. It went without me and I
just said, well, you know what? That's
the way it sometimes goes.
Here's another one I didn't take a
single trade on, WETO. It's hitting our
scan right now as it goes up to $11 a
share. I didn't get any trades on this
one and I don't feel too badly about
that because if you look at this chart,
this is a stock that's been selling off
for quite a while. We had some good
moves on it back in, you know,
mid-August. We had this squeeze here
from $8 all the way up to 52 and then we
had this descent all the way back down
to six. So, it pretty much gave back all
the gains. Now, today it bounced up
right here for one candle from 750 to
850 and then goes back down to seven.
And that to me felt like a trap.
It popped up a little bit, some long
traders jumped on and then shorts
hammered it back down and it flushes.
Then at the open it rips back up here.
Uh, I'm not really compelled to trade
something like that. I feel like it's on
the backside of this big move from
August 17th. It's a little bounce off
the low.
What's the total upside potential? I
find it to be generally pretty limited
in this type of scenario and so I didn't
go for it and yeah, I don't feel badly
for missing that. I don't feel that I
missed it. I feel that I chose not to
take that trade because the risk and
reward just didn't add up.
So, that was WETO. No trades on that.
Then we had XAIR. XAIR pops up and this
one has FDA breakthrough designation. It
squeezes up and comes all the way back
down. Full round trip. It's now down 5%
on the day in spite of breaking news.
Now, again, there's only a couple things
that can explain the company putting out
positive news and the stock price being
negative. Number one, the company itself
selling shares as the news comes out on
a high volume day to raise money, which
they can then put on their balance sheet
and allow them to be better capitalized
to continue their research and
development. That's number one. Number
two is
institutions that have owned the stock
for a while or participated in previous
private placements or secondary
offerings own shares and are selling
them on the open market on a day the
stock pops up. That's possible. Number
three, short selling. Number four,
insider selling. Now, insiders do have
to be a little bit careful
selling. There's lockout periods where
insiders are not able to sell right
around news
because of course they know
you know insider information and so
there are restrictions around that. I
worry about that more with foreign
listed securities, especially Chinese,
Malaysian stocks that
may not have people that follow the
rules, but I don't worry about it as
much with US publicly traded companies.
And Beyond Air is a US company, so
for whatever reason, the stock ends up
doing this reversal. And you know what's
interesting is that the XBI, which is
the biotech ETF, is actually having one
of its best years in the last decade. I
mean, it's having a really good year.
The ETF is up in the last
18 months like 200% over 200%.
So, biotech is hot right now. Biotech
sector across the board. Individual
biotech stocks, obviously, are leading
the way. Not all of them will and all of
the small cap ones, some of them will
fail. But this year we have seen a
number of really nice biotech stocks and
so this is something that I'm definitely
paying attention to. Uh
but I'm also, you know, not trying to
fight the the momentum. If something's
not working like XAIR, I'm just leaving
it alone. So, on this one, it comes out
with breaking news. It pops up. I have
my hand on the buy button. I'm watching
it. I'm watching at 5:50, but the
volume's a little too light right here.
See how the volume was building up? But
even right there, the volume was still
less than half a million shares. So, I
was like, "I'm not sure if I can trust
this." As quickly as it pops up, it
could drop right back down, right? A big
seller comes and just pushes it down,
and it could be the end of it, and then
the chart's broken, and I'm in too high.
So, I wait, I wait, I'm watching it
here, comes back to 6:50 right here. It
pushes a little higher, I missed that
trade.
Again, hand was on the buy button, but I
was like, "Uh, do I really want to buy
it at high of day? Volume is still
pretty light. I don't." Pulls back, I'm
like, "That's all right. If it's a
really strong setup, a really strong
stock, I'll get another setup." And I
didn't.
And this here, this sort of liquidation,
this big flush, um, interestingly, this
stock was on short sale restriction. So,
that big flush there that we had on the
1-minute chart was not from shorts
hitting the bid. Shorts could not market
this stock and, you know, bury it
because it was on short sale
restriction. So, all of that selling
either came from long buyers who bought
in this area and bailed out here, the
company itself selling, you know,
institutional investors that have held
it for a while selling, or
you know, insider selling.
You know, it's one of those scenarios,
and we're not sure which one. We can
only speculate. So, XAIR ends up
failing. All right, so now I've got a
couple failures in a row. We had NCRA,
this one popped up earlier, ends up
failing as well. It's rallying up now,
but I wasn't not interested in it. And
so, none of these stocks were really
that great. COOT, this is one of the
ones on the watch list, Australian from
Friday. It was gapping up on Friday,
ended up kind of selling off a bit. But
AEHL,
this one, um,
I did trade, and this one has this
after-hours move on Friday. It's a
Chinese stock. And basically, I was
skeptical about it, but this is the way
I approached it. I saw that we had this
move on Friday, of course, and then I
noticed pre-market that we were kind of
basing out in this area. So, we had
popped up at 4:00 a.m. and sold off,
came back to VWAP and rejected, back up
and rejected again, then we come back up
here and we break through. And so, I
ended up jumping in as it squeezes
higher right through here. So, this is
my trade. I only took one trade on it,
and I'll hide my video so you can just
see those um orders. So, I was in at
662, 669, and 682 buying as it was
squeezing up here for the break of
seven. It breaks seven, hits a high of
709, doesn't hold, comes back down, and
I'm selling it
for about 11 cents per share of profit
on 9,000 shares. $975.63.
That was not a very exciting trade. It
ends up selling off, comes back up here.
I don't trade it because now at this
point I'm not sure I can really trust
it. I noticed that we have um you know,
sort of this
uh this is a channel that I was sort of
drawing here, but uh you know, we had
this um sort of peak here with a topping
tail, a big topping tail here. So, I
didn't trade it in there. I didn't
really trust it. And
you know, I sort of felt like maybe I
was leaving money on the table, but at
the end of the day,
August has been a roller coaster. Two of
my biggest red days of the year, couple
big green days, and so today finishing
the month with a small green day and no
trades in the small account, I'll take
it. It's the end of August, September
begins tomorrow. And so, for those of
you guys who've been watching over my
shoulder and thinking about
how you can be more active in the
market, I'd encourage you to check out
our 2-week trial. We also have our Labor
Day sales running right now, uh but
you're welcome to begin the trial at the
very least, 2 weeks for 20 bucks, and
that gives you this week to be in the
chat room and see what it's like to use
this software right here for charting,
scanning, and breaking news. What it's
like to go through some of my classes,
to listen to my market commentary. And
if you decide you like it, then by the
end of the week you can join using the
Labor Day Sale coupon code. And if it's
not a good fit for you, then you know,
the 2-week trial doesn't auto renew into
anything. It's just 2 weeks for 20
bucks. You cover your market data and
some of your server costs and, you know,
you get what you get out of it. So, I
hope you guys check it out. I'll put
links in the description for both the
Labor Day sale and the 2-week trial, and
I'll be back at it first thing tomorrow
morning, streaming at 7:00 a.m. Eastern
Standard Time. So, I'll see you guys
then, but I'll remind you, as always,
that trading is risky. My results are
not typical, and there's no guarantee
you'll find success whether you trade
with me or you learn on your own. So,
please manage your risk, take it slow,
and always practice in a simulator
before putting real money on the line.
With that, I'll see you guys back at it
bright and early tomorrow morning.