Low float stocks are starting to come back … Ra Medical Systems, Inc. (AMEX: RMED) and Top Ships Inc. (NASDAQ: TOPS) were two big runners yesterday.
And TOPS is the stock I want to talk about today…
Because there was a very important level to watch for before taking an entry.
I shared it with members of the SteadyTrade Team when I laid out my trade plan…
But I also shared it in an email alert to an exclusive group of subscribers (subscribe to my daily trade alerts here)…
So what was the entry point that could’ve helped you get in on a 30% move? And why was it so important?
Read on so you know how to plan your next trade…
Why TOPS Was a Top Watch
TOPS had a massive squeeze on Wednesday afternoon. When it broke the high of the day it went from roughly $2.25 to $4.50.
But in the afternoon it broke down…
Whoever shorted this when it started to fail is a genius … it’s my old afternoon fade pattern…
But if shorts don’t buy to cover into the washout, or cover at a critical risk level — then they’re an idiot.
That’s what I was banking on yesterday when I outlined the plan to enter TOPS in the morning…
The Key Level To Enter TOPS
The key areas short sellers use as risk becomes the area I look to enter a long trade.
I want to join the momentum of buyers above that level…
Yesterday Oracle nailed the key level of $4.16 as an entry point. Personally, I liked the round number of $4.20. But we don’t nitpick over pennies…
The point is, that’s where shorts should start cutting their losses if they were still holding.
Here’s the plan I laid out for subscribers…
You could’ve got my key entry point in Pre-Market Prep, or my whole trade plan in the SteadyTrade Team and through my Daily Market Profit alerts.
And my TOPS plan played out beautifully…
TOPS chart: 2-day, 1-minute candle — courtesy of StocksToTrade.com
The $4.20 level was for a key panic level for shorts. You can see why that area is significant from the previous day.
TOPS even continued past my goal of $5 for the trade. But we take our profits and move on…
Plenty of SteadyTrade Team members nailed trades. Check them out…
This TOPS trade made some traders’ year!
Want my next premarket trade alert and plan? Get it here.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade