Trading Challenge: Stocks Below $10
March 29, 2016
Welcome to my new $500 trading challenge: Stocks below $10! I’ll be utilizing RobinHood for no fee trading/investing and ClosingBell to document my thoughts via an analyst style.
What follows are a list of tickers that I’m currently trading or that are on watch to trade.
As of 4/25/16
RobinHood Owned
$AA $9.52 X 1 3/29/16; $10.00
$ABGN $1.71 X 6 3/30/16; $4.00
$AVXL $5.79 X 1 4/6/16; $8.00
$GALE $1.58 X 3 4/14/16; $1.80
$GBSN $.28 X 37 3/23/16; $.50
$GIG $2.80 X 2 3/28/16; $3.30
$GLUU $6.00 X 1 4/4/16; $8.00
$GNCA $6.78 X 1 4/5/16; $10.00
$GRPN $3.88 X 2 3/29/16; $4.75
$JASO $8.36 X 1 3/28/16; $9.40
$LPG $9.00 X 1 3/28/16; $11.50
$P $10.05 X 1 3/28/16; $11.00
$PARN $2.45 X 2 4/25/16; $3.00
$PETX $6.41 X 1 4/5/16; $8.00
$RAD $8.20 X 3/28/16; $10.00
$RFIL $2.81 X 2 3/29/16; $4.10
$SDLP $4.80 X 1 4/20/16; $6.00
$SKY $8.00 X 1 3/28/16; $10.00-> looking to exit
$SXCL $9.87 X 1 3/29/16; $16.00
$TROX $6.71 X 1 4/5/16; $7.50
$TRXC $1.92 X 3 4/25/16; $5.00
$VRNG $1.73 X 3 3/29/16; $4.00
$YRD to enter; $14.00
Legend: $ticker, purchase price, shares owned, purchase date; $ target price
As of 4/22/16 RobinHood Snapshot
Looking for verification of my holdings notated on my watch list? Follow me in the ClosingBell iPhone app!
On Watch
As of 4/26/16
$ADMA strong volume and positive news; $6.00
$AEGR oversold (RSI <15); $2.50
$AMD Intel deal news but reaching $3 resistance; $2.00
$ARGS overheated but breached $6 resistance; $5.00
$ARIS approaching support; $4.00
$ATHX bearish technicals; $1.80
$AVP strong uptrend and breached $4.50 6-month resistance; $4.50
$BAS strong uptrend in April; $2.20
$BBG strong uptrend but approaching $6.50 resistance-> update broke resistance and at $8.65; $6.00
$BCEI oil industry follow with high debt; $1.50
$BPTH strong uptrend but overbought and approaching $3.00 resistance; $2.00
$BVN strong uptrend but approaching $8.00 resistance-> resistance broke now at $8.90; $6.00
$CARA current downtrend; $4.50
$CAS weakening uptrend; $2.00
$CBAY $1.70 resistance break; $1.50
$CHMA plenty of cash and undervalued-> update: disappointing FDA letter 4/18; $3.00
$CJES approaching overbought; $1.00
$CRC overbought, and oil industry; $1.00
$CTIX positive phase 2 trial but volatile, and approaching $2.00 resistance; $1.20
$DNR strong uptrend in April, and oil industry; $2.00
$EDGE falling from $10 resistance; $7.00
$ERII strong uptrend; $10.00
$ETE sideways consolidation; $6.00
$EZPW company has potential if it stopped diluting; $2.70
$FBR decent fundamentals but heavy dilution; $8.00
$FDML new uptrend based on earnings revisions; $9.00
$FES volatile with weak fundamentals; $.30
$FOLD slow uptrend and biotech buzz; $8.00
$GOL heavy debt and dilution- quick trade; $5.00
$HBIO low debt and just needs profit, with $3.10 resistance; $2.60
$HMIX decent fundamentals, $14 high 2014, and overbought; $8.00
$INO Ebola vaccine trial buzz; $7.00
$IO recent acquisition; $4.50
$KOOL technical downtrend; $3.00
$LEU dilution in March on fluffy news; $1.00
$LGCY strong uptrend in April, and oil industry; $1.00
$LRAD volatile downtrend; $1.60
$MACK uptrending since March but overbought; $7.25
$MBI profitable company but in technical downtrend from overbought; $6.50
$MNOV decent fundamentals but overbought; $6.00
$MRLV used to have $16.00 resistance, and decent fundamentals, but overbought; $8.50
$MVIS approaching oversold; $1.50
$NEOT overbought, and was $15 last Sep; $.60
$NQ volatile uptrend; $3.75
$NSM downtrender due to high debt, but bounce opportunities present along the way; $8.50
$NWY overbought from ER beat 3/17/16; $2.50
$ODP very overbought and P/E 500; $5.00
$ORIG just gained 25% but technical sell appearing; $.75
$PACB oil industry; $8.00
$PARN approaching $2.00 support; $2.00
$PN strong uptrend since March; $5.00
$PYDS volatile the past 6 months with $1.50-$2.40 range; $1.50
$RXDX recent downtrend; $5.50
$S consolidating for next leg up; $3.25
$SEED falling from overbought; $1.50
$SID tremendous volume the past 2 months, and profitable;
$SQBG overbought; $5.50
$SRNE low debt but overbought; $5.00
$SWN nice uptrend in April, and oil industry; $7.00
$SXE oil industry; $1.00-$2.00
$TIVO just ended a spike and volatile; $8.00
$TLN uptrending the past month; $8.50
$TROX in an uptrend price channel but weak fundamentals; $5.50
$VCEL coming back to support; $2.00
$VHC approaching support; $4.00
$VSLR heavy dilution past month; $2.20
$WPX overbought; $8.00
$WYY if $.70 resistance is broken then consider; $.60
$ZHNE volatile and technical sell; $1.20
Legend: $ticker why on watch; $ target entry
Background
High risk trading is common to new traders. The goal is usually to make 1,000% gains to have small account values grow faster. Never mind the statistics that show 1,000%+ gains are a rarity. The fact that investors like Warren Buffett have done it shows…wait a moment. Warren Buffett is primarily an investor? Not a trader? What’s the difference? Generally, an investor is one who holds a stock for 365 or more days while a trader holds for less than 365 days. Also, Warren Buffett has been documented as making more recently from derivatives trading than the value investing strategy he’s known for. I digress.
Strategy Change
The past few weeks I’ve been obsessed with finding $10 or less stocks worthy of a trade or investment. I’ve traded OTC stocks in the past but liquidity and market maker challenges have forced me to look else where. My new focus will be more liquid penny stocks on NYSE and NASDAQ. I’ve been speculatively trading options, with stocks as the underlying asset, but will look to more mid-term and long-term prospects there as well.
Why the change in strategy? A few reasons:
- Evaluation of my past results show I’m too risky. Big gains have been seen but losses have been too great also.
- My time to day trade has evaporated.
- Results analysis showed lack of liquidity cut into my gain possibilities.
I’ll still be trading/investing high risk vehicles but I’ll be adding in some risk mitigation identified below.
New Challenges
Holding for longer time periods is more challenging for me historically:
- Patience is a virtue I lack (working to correct)
- More events can occur than anticipated to alter a predicted trade/investment outcome
- More emphasis on fundamental analysis is required
- Diversification will be key over 20%+ account value trades
Building upon what I’ve learned so far I see these new challenges as a move from a focus on gains to a risk limiting perspective. I can still use technical analysis to follow traders/investors who may be better educated then I. I can perform my own research while utilizing fundamental analysis skills picked the past few years. Entry and exit points will be known before entering.
Resources
Here are trading resources I utilize to find stock targets.
iPhone Apps
Trading Service
Below are free and/or paid services that I’ve followed or paid for over a year. I do not give out their suggestions but rather recommend their services.
Past Trades
$CWEI $8.55 X 1 4/1/16; $18.00-> $14.00
$DSX $2.30 X 2 3/29/16; $2.50-> $3.07
$EDGE $7.83 X 1 3/29/16; $10.00-> $9.06
$GALE $1.26 X 4 3/30/16; $1.60-> $1.62
$GALE $1.40 X 4 3/31/16; $1.60-> $1.62
$OHRP $3.37 X 1 3/30/16; $4.00-> $3.87
$VALE $4.12 X 2 3/28/16; $5.00-> $5.22
Legend: $ticker, purchase price, shares owned, purchase date; $ target price-> $ exit price
(Images courtesy of investorplace.com and Forbes)
