Trade Plan: SELL (before market close)
Here is what happened:
(click to expand)
Commentary: A very interesting trade scenario. Our data was good on the short, but as the folks in the trade room witnessed last night, it unfolded not quite as planned. They released a little late and the release numbers showed a print of a beat on the bottom and top lines (eps and rev). As any StockJumper knows our system uses the Jump Report as a backdrop but we adjust the trade as the real data (news) gets released – going in deeper with second and third trades, or exiting quickly – if we are wrong. There was a HUGE run up in the stock price over the trading session that day – with the stock price up from open over 7% – which means someone probably had the numbers – and it was a head fake, the way it was released. The price movement just didn’t feel right especially with our Jump Report data backdrop. We went short mid day on one of the pop moves at $7.5. We announced our trade plan in the trade room.
When they did finally release about 40 minutes late – we read it (as we always do) and saw the EPS beat and felt the safer move was to exit the trade at a break even while we could – and not risk to going north further. After all it “appeared” to be a solid beat in the press release. The truth was a bit different as it often can be – with this stuff. Turns out their forward guide was not just soft it was terrible – as our original data suggested. We (regrettably) did close out our position slightly better than break even. Then an hour or two later the stock price tanked when they released their forward guide – which was as we forecast. Sales and operational costs going forward suck. It was as if traders were lured into a false buy (we beat) trap. StockJumpers did fine (its always good when you don’t lose on a trade), but could have done much better… as our data was in-fact spot on. This was a challenging trade however as it would lead any trader to think upon release the company is doing fine… and for a novice trader, they would be very confused on what to so. Do I go long or short on this news. If you went long and listened to anyone but StockJumpers on this trade – it was a big mistake.
The StockJumpers system works. Its amazing but its not always as simple as just trading an arrow as a novice would like it to be. By being skilled and in control of your psychology you can make tremendous profits leveraging the data. But you do need to know what you are doing. This isn’t investing… its trading. A different mind-set. Different skills. And its why it can double or triple your money if you know how to do it. If you don’t know how to trade these events – do not risk it. Get trained please. Start out slow with low risk trade allocations or paper trade it before you do this with real money. Shame on you if you don’t get the training – you deserve to lose your shirt. Call about our training programs. We offer 3-days boot camps that will give you the skills and the trader mindset you need to make this work.
Option Play: 200-300% – we announced a potential options move – that was a cheap and low risk play in the trade room. May 16 PUTs <6> strike were a dime or so.. .10 cents which means if we got a 10% + delta on the move it would be a sure thing profit wise. Even though the PIR was dodgy – this PUT opened this morning at around .30 cents. As the underlying stock moved up from a low of around 6.30 it lost value quickly and is back to around .16 cents end of day. Still if you bought these, you probably made out some-where at double your money.
Jump Zone Profit: 14.8%
(from staying short)