You may have heard before about a boring market, but today I want to look at some prime players that show what it's like to fall into that trap.
$OXBR, $NSYS, AND $WMLP
$OXBR, $NSYS, and $WMLP are filled with micro float, spiking gap ups and gap shorts, and personally, I find shorting anything in the float under 2 million may fake you out. Being cautious of micro float is an excellent way to go because there’s only a couple of entry points to try for that potential profit. Micro low float stocks will trip you up if you’re chasing weakness or strength because you can get dumped on or get a massive short squeeze as a result.
A CLOSER LOOK
Taking a closer look into these recent players, $OXBR shows a lack in volume. I didn’t want to short here because the general market comes in around 20-30 million shares traded per day, and with $OXBR, we just aren’t seeing that volume. Determining what position to take based on volume will help you decide whether to go long or short.
If you see micro float stocks starting to get crowed, then it’s favorable too short because not everybody can do that. When there’s a specific volume, and 90% of people are going long, with a rotating float, people will hold on to that stock for a while. That’s why float rotating is beneficial to the long side instead of the short, especially on the first green day.
POSITIONS TO TAKE
With $NSYS, we see a perfect overextended gap down, and with that, you must have a volume block. If you’re trading without that block, you won’t have good odds on the short side because of the gap down. $NSYS doesn’t hold any assurance too short, and that’s why there’s a massive sell-off at the opening. We can also relate that to $WMLP when it showed us how most penny stocks that have been halted lead to a sell-off because no one wants to hold on to something that has lost 100% of its gain. However, there’s always that 1% chance of seeing a massive spike. But do you want to put yourself in a position to get caught in a hole for that little of a percentage?
So when you’re faced with a boring market, understanding what position to take can help ease the emotions of boredom and potentially making bad trades.