I love when chat rooms and social media “influencers” alert a BUY on a stock…
I’m talking about the quintessential pump-and-dumps.
Nine times out of ten, they’re front-loaded only for these cats to dump on retail investors — particularly at a time when folks are down on their luck…
“I just need one good trade…”
And for that, we give no love to those who pump.
That being said, if the stock is running on a catalyst outside of the pump, then I say the more, the merrier…
The truth is that when you’re aware of these schemes scams, you can still profit off of them.
One stock that has gotten some attention lately is an Israeli drone company that IPO’d a little over two months ago.
And they’re starting to pump it…
Is there a catalyst on the horizon? No idea, but check the chart.
Here’s Mobilicom Limited (MOB):
Above here is the 78-minute chart…
Not quite the hourly, but I like the signals I get off this better.
Sometimes you don’t need to change the ticker, you just need another look.
But the daily is useless considering the lack of chart history… And when that’s the case, go to the shorter time frames, especially if you don’t plan on holding long.
The key to these pumps is trading the range as you wait for the explosive move higher while minding your cutoffs.
These types of stocks are preceded by a trading range, albeit one that’s limited, so you’re looking at buying a core position and then offloading the swing shares every other day for the 5-10%… This will eventually create a “free” trade if done correctly.
Back to the chart…
Setting a stop on these types of charts can be tough considering how erratic the movements can be.
Whole dollar amounts… ATR (Average True Range) multiples… low of the support…
…whichever you choose, stick to it.
Here, I’d look for a “kill candle” and I’ve highlighted an example far left.
Notice on the lower chart, the Alpha Waves tool we use when live trading and sending out alerts in TRADECOMMAND wasn’t too keen on this heading anywhere, keeping you out of trouble.
This is a bit of a contrast when looking at the current setup. We’ve got two green dots and the composite Stochastic is flat with a slight curvature to the upside.
And that’s after a brief pump just two days ago…
Now, look at the Volume bar I’ve circled in white.
This shows a ton of selling, likely because all the folks who got stuck around the time we saw the drop were dying to get out…
Well, that makes room for a reset.
The share price has held above the 78.6% Fibonacci Retracement and is now inching higher into a solid buy zone…
For further confirmation, a move over the green dotted line at ~$1.60 with a close above it could be a solid BUY signal.
But, for me, under $1.40 is a no-go.
(Disclosure: I hold no position in MOB but intend to initiate a position in the next 30 days.)
This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.