We had two big gainers in premarket yesterday that were up as much as 137% and 298%!
But when the market opened they both tanked and gave back most of their moves — one of them got decimated and gave back the entire move plus almost 30%!
So what can suck the momentum out of stocks and leave them for dead that fast?
Today I’ll share the reason these two stocks tanked.
Plus, I’ll share another stock that ripped at the open but also eventually got hit by the same phenomenon and dropped 28%.
But probably the most important lesson you’ll learn today is why this happens and how you can avoid these stocks — so let’s dive in!
How to Avoid Crashing Stock Carnage
The first big 137% gainer yesterday morning was Actelis Networks, Inc. (NASDAQ: ASNS).
It spiked on news that it received “orders to deploy its hybrid fiber-copper networking solution to support IoT connectivity for major highway and rail systems in Japan.”
The Breaking News Chat team alerted it right at 8:30 a.m. Eastern.
It wasn’t a super exciting headline but it was enough to spike the stock from $2.20 to $5.22 in a few minutes.
But before I could even make a plan for it, disaster struck…
The Breaking News Chat team alerted it as a chat pump just nine minutes later.
So I didn’t want anything to do with it. The chat guy has been ice-cold and hasn’t been able to spike any stocks.
Sure enough, the stock died after he got involved in it…
The next big premarket gainer was Renovaro Biosciences Inc. (NASDAQ: RENB).
It’s an AI stock that was soaring on a merger headline that mentioned cancer.
Again the Breaking News Chat team alerted the news and the chat pump. It only took the chat guy two minutes to jump all over this one and destroy it…
By the time the market opened, I wanted to tell the chat guy to go back on vacation and just go away.
But he wasn’t done ruining all the stocks with potential yet…
And when the market opened, it was the first stock to hit Oracle’s signal…
Oracle’s signal was $5.70 and the Oracle support and resistance lines showed resistance at $6.05 and $7.46.
TNGX blasted through those resistance levels and hit a high of $9.39 for a 64% move from the signal.
But it was also halted multiple times which can be frustrating.
So you might be wondering how the chat guy killed this stock…
Well, he was a little late to alert his sheep to this one.
The Breaking News Chat team alerted that the chat guy was in TNGX the minute it unhalted. The stock hit its high of the day, and then quickly tanked $1 per share.
Too bad the chat guy’s sheep don’t have the Breaking News Chat or Oracle so they could’ve caught the move on the way up instead of buying the top…
I feel bad for them but the tools are available if you want them.
Anyways, you might be wondering how the chat guy mentioning a stock can tank it so fast.
Why Chat Pumps Fail
Here’s how chat pumps work…
The pumper typically buys up shares of a stock before they alert their followers. So they already have a position when the alert goes out.
Then when the sheep enter the stock on the alert, it brings in volume and pushes the stock price higher. The pumper sells into that volume and price push…
And once all the sheep are in it, there’s nobody left to buy.
So the stock reverses. And as it goes down the sheep get scared and sell. That adds to the selling pressure and it’s why nine out of 10 chat pumps fail.
If you want the tools that can help you avoid getting caught in chat pumps — try our Breaking News Chat.
If you want our Oracle algorithm to show you stocks with the potential to explode each morning — attend a webinar here to learn how it works and how to get it.
Have a great day everyone. See you back here tomorrow.
Lead Trainer, StocksToTrade