shorting a stock
…because it’s important to know what is happening underneath. Embedded beneath a simple trade is the number of shares traded, market cap, and float, as well as any resistance applied. The one thing to remember is that shorting is a tough game, and it’s vital to take advantage of any low hanging fruit, such as shares nearing the $.20-$.30 range or a 2-3% return. We look for these numbers, especially since the game of shorting often has no reward.
By looking closely at several examples, we will see the stock's reaction to the variables discussed above.
FIRST IS $BSPN
…a stock with market cap and low float, and is primed for a level of resistance. One thing to keep in mind when a stock is first starting to go up it is difficult to short because there will most likely be no reward with all the initial support the stock has. There might be some opportunities for a short squeeze, but overall its best to be patient.
With the example of $BSPN, we saw this, but we also saw a huge candle get stuffed, and almost 500,000 shares were traded. But what we didn’t see was the price go up. That’s a clear indication that it’s in high selling mode, which translates to selling in the short term.
NEXT IS $AKER
$AKER is another stock that we have seen in the past go parabolic. With this stock, one can afford to risk in the long term as the charts are showing massive amounts of volume and a change in price. If the trade holds with fresh volume at a tremendous rate, you can assume there will be lots of resistance as well.