How to trade 270% gainers like CBIO

Money Monday didn’t disappoint yesterday…

The major indexes bounced back from a bad week and there were a ton of trading opportunities… 

Like Redbox Entertainment Inc. (NASDAQ: RDBX) and AgriFORCE Growing Systems Ltd. (NASDAQ: AGRI) that I outlined on my weekly watchlist.

But there was another morning play that stole the show. I usually don’t like setups like this … but something about it was unique…

That’s probably why it survived a chat pump and gained over 270% yesterday. Learn how you can catch moves like this below — even without my trade plan ideas…

Get special pricing on the algorithm that can help you plan trades here.

How to Catch 270% Gains

Yesterday, the Breaking News Chat team alerted Catalyst Biosciences, Inc. (NASDAQ: CBIO) an hour before the market opened. 

The company announced an asset sale that generated $60 million. I talked about it in Pre-Market Prep… 

Now, I’m not saying any of the fine individuals on the CBIO board of directors will take part in those kinds of celebrations. 

But $60 million is a lot of money for a company that had a roughly $11 million market cap last Friday… 

Normally I don’t like stocks with news of a one-time infusion of cash. But the amount of money injected into CBIO made it unique. 

Theoretically, if the company was worth roughly $11 million last week and the company put $60 million cash in the bank, it would now be worth $70 million. 

Does that mean CBIO will double and become a $70 million market cap company? 

No … It’s still a trashy biotech. 

And as the premarket trading action continued and I was in the SteadyTrade Team webinar … CBIO became a chat pump. 

The Breaking News Chat team alerted it when the chat guy went long in premarket…

So for me, there were two potential plays in CBIO yesterday…

• If you were aggressive and were already in CBIO when it became a chat pump — buy in pre, sell in pre.
• Or trade a post 9:45 a.m. dip and rip.

Because buy in pre, sell in pre and the dip and rip are complementary patterns when it comes to trading chat pumps. 

Here’s why…

When a ‘guru’ sends out their alert to chat sheep followers, the stock spikes in premarket. But when the market opens, it will pull back as the ‘guru’ sells and premarket traders take profits… 

Then as more traders come in, buying on the press release, you get a dip and rip … Or, if it dies it dies. 

Now, let’s look at how that played out in CBIO…

It had a massive spike in premarket on the press release and chat pump. But when the market opened, it pulled back. 

Then, a few minutes later, CBIO spiked. It didn’t completely fall apart like nine out of 10 chat pumps… 

Once CBIO was a chat pump survivor, I told SteadyTrade Team members the dip and rip was a good risk to reward trade…

But if you’re not in the SteadyTrade Team to get my game plans and notes, you still could’ve made a similar trade using your StocksToTrade platform…

Oracle had a similar trade idea with a signal at $1.03 and resistance at $1.28. 

You can see by the Oracle support and resistance levels on the chart, that it went even higher…

If you’re just starting out with your trading and CBIO looked like a risky trade, consider this…

If you traded a dip and rip in a chat pump survivor and stopped out at VWAP for a 10-12 cent a share loss — that’s still a good trade. 

Because today there could be another one where you make 50 cents a share. After two trades, you’d still be up roughly 38 cents a share. 

And rinsing and repeating your strategies is how you consistently grow your account over time. 

StocksToTrade’s built-in tools can help you — get them here!  

I’ll see you all back here tomorrow.

Tim Bohen

Lead Trainer, StocksToTrade