Last night my free webinar in chat discussed how to short stocks under $5 that
are overextended and due to dip. With the European markets red this morning and
futures slightly down, I think its fitting we add a few overbought stocks under
$3 to my previous list of good short ideas. Click here for a detailed article I
did Thursday to learn about shorting stocks under $5. Click here to bookmark my
FREE DAILY WATCH LIST of potential buys and shorts. CAMAC Energy ( AMEX:CAK ) is
up over 100% in October with an overbought Relative Strength Index reading of
72.16 heading into Fridays session. Shares closed at the high of day Thursday
meaning CAK might have a little more run in it before early entrants look to
take some profits which is only natural. The market cap is $160 million and my
preferred broker does have shares available . Earnings are scheduled for
November 9th. The trading range here is $1.10 to $.85. If it continues to go up
Ill look for short entry just below the 200 Moving Average of $1.28. I like this
company but stock will dip when overbought and therefore make good day to swing
trades for active traders like myself and my subscribers. Glu Mobile (
NASDAQ:GLUU ) is a stock I like and trade long regularly. Thursday I closed
swing trade for around $1,000 in profits on the long side. I took those profits
when it failed to breakout from its consolidation pattern in this bull market.
The stock is not overbought but seems to be saturated with sellers around $3.10
to $3.20. It did move up into the close Thursday so maybe its finally going to
break that $3.18 range heading into next weeks earnings, however, after watching
my swing long position for days Im inclined to think GLUU might be ready to
pullback Friday, especially if the market takes profits making lower highs as
the session wears on. The trading range here is $3.15 to $2.87 $2.66. A break
to the upside of $3.18 could signal a move to $3.45 so having been long
yesterday before I took roughly $1,000 in profits, I have no problem switching
gears and buying GLUU again into earnings next week if it breaks this
consolidation pattern to the upside. Shares are available to short at my
preferred broker . The stock has a market cap of almost $200 million and an
earnings announcement on November 3. Raystream Inc. ( OTCBB:RAYS ) continues to
be one of the best short opportunities in the small cap market, but shows no
signs of cracking just yet. Im looking for a decline in volume here or the first
down day as a sign of weakening. The goal is to be short when the stock
collapses like another pump and dump White Smile Global ( OTCBB:WSML ) did
Thursday. Right now its very difficult to find shares to short of these bad
stocks but if youre looking for predictable scores in an choppy market, these
are usually good bets if you know what youre doing. Unlike the other two
companies above that are solid small caps up for good reasons, Raystreams rise
is at the hands of promoters who tout the stock to inflated levels until one day
the boat tips and the chart looks like Lithium Exploration ( OTCBB:LEXG ).
Timing when shorting trades like RAYS can be difficult and they can often go
supernova before they collapse, evidenced by LEXGs massive run so they are not
for the beginner. The Relative Strength on RAYS is extremely overbought at
89.28.
No comments:
Post a Comment