When Not To Hold a Stock Overnight

Have you ever wondered whether to hold a stock overnight?

When it comes to holding anything extremely speculative, you really have to understand what you are trading.

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The Big Picture

It’s always the same rules. When it comes to speculative penny stocks, I think you’re crazy to even consider holding a loser or breakeven trade overnight.

Let’s use a stock that ran last week as an example. Namib Minerals (NASDAQ: NAMM) was an earnings winner on Thursday (Oct. 1).

Start with the basics, okay?

• The company is based in the Cayman Islands and runs gold mines in Africa (sounds sketchy)
• Its recent earnings report was positive, saying it had “funded both [mining projects] in a non-dilutive manner” (it’s actually profitable, which is rare for penny stock companies)
• It’s a low float stock (7M)
• Average volume is roughly 422k shares per day
• It traded higher than average volume on Thursday (~7.7M shares)

Take a look at the chart and then I’ll share why I would, or would not, hold a stock like NAMM overnight.

The Oracle Algo identified NAMM as a potential trade that morning. It then alerted the long signal at 10:12 a.m. ET.

For the sake of this thought experiment, let’s say we bought it at the signal.

Two Quotes To Trade By

With a stock like NAMM, there are two quotes that come into play:

“Winners Hold Winners, Losers Hold Losers”

Is your position green? If you’re roughly breakeven, or in a loser, always cut it.

Most people hold losers.

By doing this, they increase their losses because weak stocks usually gap down the next day.

“The Trend Tends To Continue the Next Day”

Not always, okay? This is not set in stone. But overall, the trend tends to continue.

What that means is, if a stock is closing strong (using the 4:00 p.m. ET close) that trend is most likely to continue the next day.

So, if you’re green in the position and it’s uptrending into the close, you have a profit buffer. There’s a good chance it will gap up the next day (and the trend will continue).

If you’re holding a green position and the trend does NOT continue, you just give back gains.

Now, what if it starts fading into the close? Or dumps 20% like NAMM did in 2 minutes Thursday afternoon? That’s a clear sign it’s no longer closing strong, okay?

My Take

Always know what you’re trading and understand the odds before you hold speculative stocks overnight.

And remember, a core part of what we do is trend following. You can hold strong trends, but get rid of weak trends. It will save you a lot of frustration.

Watchlist

On Thursday (Oct. 1), QTREX Quantum Ltd. (NASDAQ: QTEX) announced positive independent test results for its cryogenic quantum interconnects. Friday’s continuation move put it on my watchlist for today:

QTEX hit the Oracle signal early, rejected at major resistance, and then channeled between the two. It’s not a low-float stock (42.7M shares), but if it continues trading in that range, watch for a day-three surge today.

On My Radar

• The AI spending story keeps getting bigger: Broadcom Inc. (NASDAQ: AVGO) has agreed to lend Anthropic up to $42B for infrastructure
• The Fed according to Kalshi: low jobs number drops expectations of a rate hike at the next FOMC meeting
• President Trump is expected to pick Director of National Intelligence Jay Clayton as the new “superintelligence” (AI) czar
• Tim Sykes reveals a little-known company that could benefit from $1.1 billion in earmarked Pentagon funding