As a trader, you have to constantly adapt to new information that’s presented to you…
Even as a veteran trader, I have to do the same.
You can’t let yourself get so biased that you miss out on opportunities…
Or so stubborn that you hold a loser because you’re not willing to accept that you’re wrong.
So today I’m giving you an example of how and why I changed my opinion about a stock…
It doesn’t mean you’ll always be right, but it’s a lesson in adapting and flexibility.
Nearly $1 Trillion in cash is set to exchange hands on November 1 — see why you should care here.
When to Change Your Opinion About A Stock
A few days ago in my morning webinar we were talking about Tupperware Brands Corporation (NYSE: TUP)…
The stock looked like it was going to have a bounce day after a multi-day run.
But I didn’t love it…
Fast forward to yesterday and TUP was on our radar in premarket again. This time I made it my number one watch.
So what changed in the span of a few days that made me change my mind?
The company’s fundamentals didn’t change — it wasn’t all of a sudden a good company…
But there was a change.
When I first talked about it in my morning webinar it was after the stock had already run from roughly $1.20 to $2.70…
TUP chart: 3-month, daily candle — courtesy of StocksToTrade.com
The stock was having a little premarket bounce with no news.
So I didn’t like it. There was no reason for the move and I thought the penny stock life cycle was complete…
The move was over and TUP was headed back where it came from.
But I liked it yesterday in premarket because it had something it didn’t have before…
A hot news catalyst.
The company announced a new CEO. But not just any CEO…
They brought over the previous CEO of Spanx — a company valued at $1.2 billion in 2021.
So for me that changed the potential for the stock to bounce.
Shorts also hate the stock, it was easy to borrow, and with the news, I thought it was worth the risk to trade it if the signal was hit.
Even though the trade idea didn’t end up working out — it’s still a great lesson on how and when to change your opinion about a stock.
The market is constantly changing…
And if you are biased and you’re not flexible in how you think about opportunities, you’ll watch them pass you by.
And I wouldn’t even say TUP is done…
Small caps are heating up … All these crappy stocks continue to hang around and run.
I mean, Tempest Therapeutics, Inc. (NASDAQ: TPST) was a 25-cent stock and it’s still trading around $7.
That tells you shorts are in these stocks.
And if TUP can break $2.70 it’s a breakout.
I’m watching the hottest stocks every day in Pre-Market Prep and making my trading plans for subscribers…
See how you can get access to both here.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade