I’ve been highlighting a ton of day trading winners this week — but trashy penny stocks aren’t the only stocks offering opportunities right now…
And they’re not the only winners that I’ve alerted traders to.
One of my best alerts was actually free. And it offered up to 22% gains for traders.
The best part is, that you didn’t have to micromanage the trade, worry about offering news hitting you midday, or worry about big red death candles taking out your gains…
This was just a slow grinding trade that you could’ve entered last Monday and let it play out all week (with a risk level in mind, of course)
Its slow grind made it perfect for part-time traders and those who have full-time jobs and other commitments.
So let’s jump in and I’ll show you the pattern and catalyst that kicked off a week-long run and how you can get free alerts just like this one…
The News And Pattern That Kicked Off a Five-Day Run
Last Friday Affirm Holdings, Inc. (NASDAQ: AFRM) was one of the best real stocks of the day…
It had earnings after hours the day before and was gapping up.
Then when the market opened, it broke above the after-hours and premarket high and went from basically $15.50 to $18.30. (It’s an ebook pattern and one of the best ways to trade after-hours earnings winners.)
AFRM chart: 2-day, 5-minute candle — courtesy of StocksToTrade.com
Since it closed strong and had an earnings catalyst, it was a top watch for a weak open red to green on Monday morning.
And that’s the plan I handed out on my free weekly watchlist that Sunday afternoon.
Plus, there was another thing the AFRM chart showed me that made me think it could go higher if it went from red to green…
After downtrending during the entire premarket session that Friday morning, AFRM was able to break above the after-hours and premarket highs. And not only broke above those levels but had a parabolic straight-up spike…
We don’t typically see ‘real’ stocks have those kinds of volatile moves.
So that showed me that shorts were in this. And they were twisted…
That meant that if AFRM opened weak on Monday, aggressive short sellers would probably attack it again.
While other short sellers with risk management would likely be getting out into a dip…
So if it went green, there was more potential for it to squeeze.
And that’s exactly what happened…
You might’ve gotten stopped out at the first red-to-green move on Monday morning. But that’s okay. If you took a small loss on a planned trade, don’t be afraid to get back in when the stock makes a move again.
AFRM went green right before the market closed on Monday afternoon.
That probably caught shorts off guard and didn’t give them much time to cover their positions…
Plus, the weak price action all day probably lured in more shorts and they were probably pretty comfortable…
AFRM chart: 2-day, 5-minute candle — courtesy of StocksToTrade.com
And AFRM had the earnings catalyst propelling it and bringing in more buyers…
You can see that the combination of short sellers and an earnings catalyst created a week-long run and a multi-month breakout…
AFRM chart: 6-month, daily candle — courtesy of StocksToTrade.com
I love helping you find stocks with potential like AFRM. And I love breaking down these lessons to help you learn how to trade them.
My weekly watchlist for this week went out yesterday, so if you haven’t seen it, go check your inbox.
If you’re not subscribed — sign up here.
I give you a mix of swing trade ideas in ‘real’ stocks, and some speculative penny stocks to watch for day trades throughout the week.
But the best way to stay on top of what’s happening in the market is by attending our free live training workshops daily.
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Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade