October 19, 2014

Trade Recap - IBIO

On Friday, I saw a tweet from @BlinkX90 regarding IBIO:
So I pulled up the daily chart and noticed IBIO had recently ran from about 70 cents to ~$2.70 in three days! Then it pulled back hard, then started a dead-cat bounce:


The daily chart told me shorts were (and probably still were) interested in this stock. Moreover, IB didn't have any shares to short IBIO--proof shorts were already pilled into IBIO. Therefore, I was long biased and the news that the US Government was warning makers of IBIO's Ebola drug ZMAPP to plan for production further supported a long bias.

I pulled up the intraday chart and noticed traders had already began reacting to the news and were bidding up the stock around 2:30 pm:



I decided to break my rules and join the momentum at $2.38 because shorts were pilled into IBIO, the news was great and was already attracting buyers, $3 magnet, Ebola stocks were hot, and IBIO was also nearing a MTF breakout--which would bring further momo traders and short covers.
I sold half at $2.45 because I don't like buying spikes. I also wanted to lock in some profits and then look to add shares on any dips. But IBIO kept going and wouldn't let up! So I sold 1/4 more at $2.59, and then the rest at $2.73 because I saw someone tweet that the news was bogus--and I hadn't done any DD, so I thought it was better to be safe than sorry and lock in profits into this massive spike.


Then I went back into stalk mode because I saw a tweet from @BlinkX90 saying the news was indeed legit.



I re-longed half size at $2.89 and full-size at $2.77--risking to $2.55. IBIO began to retest the highs and broke-out on huge volume. However, it couldn't go much further, so I sold half my position at $3.05 because that didn't make sense to me. I did keep the rest of my position to see if things would pick up into the close.

 After that stutter-step, IBIO took off! I sold 1/4 at $3.27 and the rest at $3.40 for a solid win!


Recap time:

Strengths:

  1. Solid thesis (great daily chart, shorts pilled in, momo traders watching, news = long bias)
  2. Sold half profits into the first spike once there was topping action
  3. Took the rest off in pieces (batting for singles but leaving some for maximum profits)
  4. Exited immediately when I saw a reputable tweet about news being bogus
  5. Re-entered with a partial position once the news was verified but down-trendline hand't been broken
  6. Sold position in pieces (bat for singles again)

Weaknesses:

  1. Should have entered full-size after the down-trendline broke, not before
  2. Should have used a little bigger size because my thesis had several pieces of consistent evidence and few pieces of inconsistent evidence

No comments:

Post a Comment