Short squeezes didn’t disappoint us last week…
U Power Limited Ordinary Shares (NASDAQ: UCAR) — a new IPO — gained a whopping 825% on Thursday.
And sketchy low float, Mangoceuticals, Inc. (NASDAQ: MGRX) gained 240% on Friday!
I’m like a broken record … But the reason we love penny stocks and our patterns is because the moves repeat…
The patterns might not come around every day or work 100% of the time…
But they offer better odds than the random moves I’ll show you today…
If you try to trade these random spikers — you’re just gambling. So let me show you the difference between trading and gambling and you can pick which strategy you prefer…
Penny Stock Patterns For The Win
Mangoceuticals, Inc. (NASDAQ: MGRX) was my number-one watch on Friday for a break above $1.70.
It made that move early in premarket … But all wasn’t lost…
We have a pattern for the trashiest low-float scammy stocks in the market like MGRX — the dip and rip.
We want the dip to lure in all the shorts — then rip their faces off and squeeze higher.
The entry for that pattern is a break above the premarket highs. So for MGRX, that was a break over $1.87.
Then you need to have a stop loss on some key level on the chart, and you base your position size on how wide your risk is.
MGRX played out a textbook dip and rip…
MGRX chart: 1-day, 5-minute candle — courtesy of StocksToTrade.com
So you could’ve traded my alert in premarket, or the dip and rip.
The move shows that the recipe we use for the trashiest low-float stocks in the market works.
Now compare MGRX’s chart and my trade idea with U Power Limited Ordinary Shares (NASDAQ: UCAR)…
UCAR is all anyone wanted to talk about on Thursday when it went from $8.10 to $75.
But then on Friday, it opened around $30 and went to $7.80…
How do you trade it or make a plan?
On Thursday it had only traded for one day … There are no levels to play off …. No levels to use as entries or risk … No past history to use to plan a trade…
So while looking at a stock that has 825% gains in a day is fun and cool to see — you have to be able to make a trading plan.
You need to know where you’ll enter, where you’ll stop out, and what your goal is before you even get in the trade.
If you can’t make a sound trade plan, you’re gambling … throwing darts at the wall hoping to hit something.
But if you miss, you get caught in volatile downswings — like UCAR’s drop from $75 to $43 in less than an hour…
UCAR chart: 2-day, 5-minute candle — courtesy of StocksToTrade.com
Learn the patterns I trade in my ebook — you get it as a bonus when you join StocksToTrade Advisory.
You also get my three Market Update Videos per week so you can stay in tune with which stocks are hot and my strategies to trade them.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade