Missed Opportunities & Next Week's Plays

Today was about missed opportunities in the gutter.

The missed opportunities started yesterday. I had thought about shorting MNLU into the close, as it had a red doji star, and failed to increase any more despite high volume. Also, it didn't hold its ascending trendline. But, partly paralyzed from my loss in QMNM yesterday, and partly thinking that MNLU might keep gradually upticking, I decided not to.

And I missed out on a huge profit because of it, because MNLU tanked today.

MNLU was a perfect setup for a short into the close yesterday, and I didn't take it. Plus, the risk/reward was good, because if MNLU was going to increase the next day, it probably wasn't going to surge very strong, so I would've had a small loss at the worst.

The missed opportunities continued today. I had BKUNA, DSL, and UBHI as the #1 plays on my short list. I had a bunch of other financials on my short list too, which was a bad thing, because I had too many plays to look at. Combine that with my loss yesterday, and I was frozen. BKUNA, DSL, and UBHI all ended up tanking. In fact, almost all the plays on my short list ended up tanking, and I didn't even play a single one.

I need to not let losses hurt my confidence like that, as I missed some really nice gains. Also, as I mentioned in past blog, I need to keep my focus to a few plays and not watch too many stocks at once. Too many choices can make you freeze and you don't even end up making a choice.

In the last half-hour of trading, I decided to pick up 1,000 shares of NNVC.

The reason for taking this small position (well, small for me....I usually risk 50-100% of my capital, and I'm risking about 20% on this one) is as follows:

1. The chart is forming a bullish ascending triangle, consolidating right around $1.30
2. The stock is holding its price despite fading volume, which is a bullish signal
3. The MACD is ready to cross over, and both lines are also crossing 0
4. NNVC tends to surge on PR's, and they usually release PR's on Mondays and Wednesdays. Guess what? The next trading day is Monday!
5. The falling ADX indicates nice consolidation and sideways price movement, meaning that NNVC is ready for a move
6. It looks like it has had support along the 50-day moving average for the past week.

If it breaks to the upside out of this pattern, then I will add to my position. However, it could break to the downside and begin the formation of a head-and-shoulders pattern. If that happens, I'll exit with a small loss. My potential loss on this isn't high, as NNVC usually doesn't drop more than 10 cents in a day. So, my max potential loss on this is $100, but probably less as I would exit before it dropped a full 10 cents. But my potential profit is big if I add to my position on the break out of this pattern, as NNVC tends to be a 2-3 day runner when it breaks out. So, this play is a solid risk/reward for me.

I got filled for 1000 shares at $1.30. It closed at $1.31, putting my account 1 cent above yesterday given the commission I paid for the entry. So my account right now is pretty much the same as yesterday.

I did think about playing CXAC into the close. It had the ADX turning up, the white candle crossing the upper bollinger band on a volume increase, MACD lines about to cross 0, and HUGE volume.

In fact, it was very similar to QMNM before it started its run.

However, remembering my rule that I'm not supposed to play a sub-penny without a perfect setup, I decided not to play this. First, CXAC is a strong surge in a downtrending chart. These often sell off the next day. QMNM is the exception, but plays like QMNM rarely happen. Here's more what typically happens with these types of patterns:

Most of these don't hold their runs as you can see. Plus, CXAC has resistance all over the place. Next resistance is at .002 cents. So, if I did a 1,000,000 share buy order at .0017 cents, and it cost me $50 to enter and $50 exit in commissions, and it couldn't cross .002 cents, then I would profit $200 MAXIMUM...but probably less as rarely can you be perfect in your entry/exit. That's not enough profit for the large potential loss that I could incur on this play. So, the risk/reward sucks.

Plus, QMNM had the advantage of being a Lebed pump, and had tons of message board hype. CXAC has a little bit of message board hype but nothing like QMNM had.

Next week is bringing other potential plays. Here's what I'll be watching:

Longs:

Watch EFFC for the 17 cent break. EFFC is a low-floater, and can move a lot on any decent volume. Plus, the ADX looks ready to turn back up, and the fast MACD line has turned back up and looks ready to go back across the slow line. The 200 day moving average is flattening out and also looks ready to turn up. This is probably #1 on my breakout watch list for next week.

My old pal GSPG is consolidating nicely and getting ready for a move upward.

IDAE looks like it may be turning back to another upswing. Not sure how much upside this has left, though. If it eventually does break out, I won't have my mental stop so tight that I get shook out this time.

MWY is a Lebed pump that looks ready to break the $3 mark.



FRTL is turning back up after a sell-off and positioning itself for a breakout.

DEPO is consolidating at $4 and setting up for a breakout.

Shorts:

ZYXI just doesn't quit climbing, but it's getting quite up there, meaning it's ready for a long fall. This is #1 on my short watch for Monday.

GGR is a big run-up in a downtrending chart. Noticed how it had a sell-off the last time the RSI touched 70. Well, we're at 70 again.

Napster had a huge spike in a down-trending chart.

SPRD is another spike in a downtrending chart.

Have a great weekend. I'm going to be going kiteboarding again...here's a pic of me from last week....