Can You Profit From The EV Pennystocks Hype?

Can You Profit From The EV Pennystocks Hype?

Can You Profit From The EV Pennystocks Hype? 1024 546 Steven Dux
Hey guys! Steven Dux here,

WELCOME BACK.

Today we’re going to talk about the Electric Vehicle market that has been hyped up for the past week.

I’ve selected 3 tickers I am going to talk about today, which will be $DPW, $FTEK, and $SOLO. These are the tickers that we were watching last week, they didn’t create enough range for me to trade. I wasn’t interested because their float is too high with a lot of volume. I’m going to give you some specific criteria for you guys to filter. Especially in a hyped-up sector.

STOCK TICKER:

$SOLO

The first ticker I am going to cover is $SOLO.

When we’re looking at a multi-day runner, we need to look at max extension and minimum extension before seeing if it is a good shorting opportunity. First let’s look at the 5-year chart. Most of the resistance is between $5-9, the minimum extension for a multi-day runner is 300%. If the breakout is around $5 then we take $5 * 300% = $15. $SOLO barley qualifies for the criteria as it hit nearly $14. Once it qualifies the criteria, lets look at the intraday chart. We want an entry with a decent risk-reward. Many people start sizing too early.

On the intraday chart we can see it went from $9-13 on $130 million volume.

I shorted it around $11.15 which means I’m risking up to the 3-hour consolidation. There was a pre-market high around $11.41. I didn’t size in that much, because on that day the electric vehicle sector was spiking hundreds of percent in one day. Especially $DPW and $FTEK, which are following $BLNK, $DPW AND $FTEK have the highest range out of all the tickers. For me, the priority will be $DPW and $FTEK which spiked the day before. For $SOLO I got short around $11.15 and covered half around $9.20-$9.50.

Held about ¼ of the position overnight and covered around $7-$8 the next day. When you are looking at multi-day runners you are want to know where your reward is going to be, especially if you are looking for the maximum reward. Typically, in one-week, multi-day runners will drop around 75% from the multi-day runner top. Between 1-2 days, after the momentum shifts, the max drop percentage will be around 50%. $SOLO dropped from $14 to $8. I wasn’t very satisfied on the trade because I didn’t have enough risk-reward.

Shorting into multi-day runners that only give you the minimum extensions are not ideal.

STOCK TICKER:

$DPW

The next ticker I am going to talk about is $DPW.

For this ticker if you are use the bounce short pattern to short into $DPW, it’s an unavoidable loss shorting in the afternoon. The ticker started spiking around $2 and touched the resistance around $5.3-$6.5. You can see the stock is forming a massive consolidation between $5-6. In terms of volume prediction $DPW did have a large potential, trading 200 million shares within 3 hours of open. Predicting entire day volume would be around $300-400 million which overwhelms all the historical resistance, especially when comparing the intra-day volume to the resistance volume.

If the ratio is beyond 1:1 then it isn’t ideal. $DPW exceeds all the historical volume in one day. The next day it traded up to $11 and dropped to $5.5. This doesn’t have enough risk-reward for the first red day pattern, the stock already dropped 50%. So, for $DPW, I spotted the momentum shift when it dropped from $11 to $7. On the next bounce I shorted it close to $6.9 and sold ¾ of the position by end of day. I made around $100K and held onto ¼ of the position into the next day.

We have intraday support around $5-6 (Nov 23rd) and we also have support from June and July. Its going to be hard for price to get below this support area.

STOCK TICKER:

$FTEK

Let’s go into $FTEK, and this is why the EV sector isn’t over yet.

$FTEK started to spike at $1, and broke through the 160m support around $200. It gapped up 300%, up to $7. The reason it didn’t spike like $DPW intraday is because on the same day $DPW lost 50%. $FTEK is holding the trend and support. The strange part is that $FTEK came all the way up to the high and gapped down into the next day. Even though you want to short using the over-extended gap down pattern, it’s not going to happen because you have a massive consolidation area between $4-7.

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