Raw Footage $AQXP Squeeze "Float Rotation" and "Reclaim"

by | Aug 9, 2015

A few years back, I started getting caught in the front side of moves. In a nut shell, I was shorting early, thinking things had "ran too much" without really having a concrete game plan of what the trade risk should be.

There's nothing wrong with trading the front side of the move as long as you respect one rule:

Nail and bail, don't stay and pray!

The unfortunate part is most traders don't respect these rules. They don't respect these warnings over and over again and start thinking "there's no way this stock can go much higher can it?" Yes, it always can!

Anytime you start rationalizing why a stock shouldn't go higher and you remain short, you're likely in the trade for the wrong reason. If you react to the front side of the move, make sure you take profits on dips and don't build a position against a name that is only getting stronger and stronger!

RationalizingTrade

My warnings came out super early on this name Friday, as I know which stocks are likely to get traders in trouble. Despite not getting an early entry long because I felt it had skipped up too much on low volume and I was staying away, things changed. Despite the low volume move, millions and millions of shares came flying in giving it a solid boost. I traded it short once in the $4-4.10 range before it quickly snapped to $3.80-3.90s, only to reclaim the $4s (where I took it off) and carry on it's trend. I decided to stop looking for the top and join the squeeze/trend higher by getting long in the $7s, from which I made it to $9-9.30 on the exits.

I had tweeted in the $7s that as crazy as it sounds I wouldn't be surprised to see it gap fill to the $10.70s. As much as I was in disbelief, it was a very likely scenario. Fast forward 30 minutes and guess where we were at? Yep! Filled the gap on the daily chart.

FloatRotatin

Here's Friday's chart and a description of the term we coined "float rotation" in our education products which ended up sticking around the community:

1. How to identify them

2. The signs you need to look for

3. When to stay away

Another #floatrotation (The term we use referring to names with tightly held float when it begins to trade two, three, ten times and beyond the listed float causing shorts to 'add add add' in disbelief only to send it higher. Forming new support levels along the way trapping each step of the way. The idea behind it is that once the float rotates the original move no longer matters because if sellers wantes to sell they've had every opportunity to as it's liquid enough. As it goes to the next level and volume hits three four times the float sellers have had any opportunity to get out they want while creating a higher average price for longs -- in other words: it's unlikely the $2 $3 and $4 buyers still have that average at $7 $8 and $9 they're likely downsized or already sold out and potentially buying it higher). You'll notice many "reclaim" spots that I went over on my blog post reviewing 2015 trading mistakes on investorsunderground.com/blog I was very fortunate to have made a few long trades on this name after a couple short attempts which I typically don't do! Still working on it! Usually I patiently wait for a top form and confirm no follow through momentum. @gdunner is very good at getting long on the warnings not to short and trusting the moves after they are up a large percentage, I'm still working on it 🙂 We see these time and time again but nothing like this one in a long time. Last big #floatrotation style plays were $PLUG (a while back) $LAKE $DGLY $VLTC $ITEK $NDRM $VSR $APT and many more - check the yearly charts on these to see the moves. Once momentum fizzles the trade comes in very nicely but NOTHING to fight on the front side of the move! #daytrading #profit #learn #chatroom #success #losses #stocks #stocktrading #stockmarket #forex #daytrade #consistency #investorslive #tradingrules #nasdaq #chatroom #watchout #shortsqueeze #squeeze #floatrotation #momentum #coinedterms #focus #identify #wild #stocksgonewild

A photo posted by Nathan Michaud (@investorslive) on

This next piece is long an unedited - go back and check chat logs, check comments and check the bid/ask action along the way. Most importantly check the "reclaim" levels as discussed in my 2015 biggest flaws most and see if you can identify them! Leave comments below!

Raw footage of $AQXP Friday

Make sure to click HD and let it load!

Enjoy

Below is the commentary from the chat room - the point here isn't "I called it." Those that are screaming "we called it we called it" just want to get your attention. My point with all of this is to show what was going through my head as I saw things, what the key levels were to ME.

Just like I mentioned in one of the recent blog posts, if I'm trading a low float name I will not alert it; I only post the big picture idea and plan.

When trading a CROWDED name, I write what I am looking for and the key levels of interest. If people need to be told when to buy and sell names like these (Just like OTC stocks), they should not be trading them!

The key to focus on is the level's that interest me and WHY. I only have a video from mid day on -- the early levels for which I was watching you'll see $3.20s over/under or $4s over/under as a guide was the first spots I was interested in. It's important to watch where the majority of volume is going on, where it's consolidating around and how it reacts after it pulls back UNDER that level and then RECLAIMS the support.

Again, what is everyone's bias? If everyone is bashing it and short -- saying it CAN'T BE but ... happens to keep going, do you want to be with the crowd?

Here's the picture I posted early on to remind people sometimes it's best to stay away from the crowd bias:

[Aug 7, 2015 8:32:12 AM EDT] Yelk AQXP had positive 2nd endpoints ah yest. CBLI type like float, gap to fill. Doesn’t have to run but worth an eye

[Aug 7, 2015 9:11:53 AM EDT] InvestorsLive AQXP low vol if it turns into something will be interested but nothing here far too low vol

[Aug 7, 2015 9:18:30 AM EDT] MW92101 nice call Yelk, AQXP next bio low float runner today possibly

[Aug 7, 2015 10:08:25 AM EDT] InvestorsLive 320s over/under going to start monitoring AQXP

[Aug 7, 2015 10:10:26 AM EDT] InvestorsLive going to start into AQXP pops — if a stuff move here — I do not plan on alerting the trade personally prefer to see 320s over/under peak out for any real trade otherwise can ramp $3.50-4 easily on air — VERY crowded name so will trade on own — Just FYI

[Aug 7, 2015 10:11:37 AM EDT] InvestorsLive I am watching the vol to see how it reacts on break outs — lik ejust now — if it stuffs again the tell

[Aug 7, 2015 10:11:41 AM EDT] InvestorsLive be safe guys on it and have a plan

[Aug 7, 2015 10:13:12 AM EDT] InvestorsLive $3.33 so far absorbed on AQXP key area until that cracks and is peak be mad careful

[Aug 7, 2015 10:14:56 AM EDT] InvestorsLive AQXP nHODs

[Aug 7, 2015 10:20:25 AM EDT] InvestorsLive remember guys best to see key levels snap on AQXP than try to nail the top and be .50 too early

[Aug 7, 2015 10:22:02 AM EDT] InvestorsLive AQXP thru $4

[Aug 7, 2015 10:26:19 AM EDT] InvestorsLive now intereste AQXP pops – wont post entries but starting to trade/scalp it on s/s side

[Aug 7, 2015 10:26:43 AM EDT] InvestorsLive need to see $4-4.10 re-test and fail if it holds $4s — I am NOT staying w/ the name

[Aug 7, 2015 10:27:04 AM EDT] InvestorsLive Any new traders — key area = $3.70s imo

[Aug 7, 2015 10:27:27 AM EDT] InvestorsLive the reason it’s here is not the news it’s the early shorts and the add add add guys

[Aug 7, 2015 10:30:09 AM EDT] InvestorsLive AQXP will re vist on a trade later on if $4 peaks and $3.70s

[Aug 7, 2015 10:30:22 AM EDT] InvestorsLive let the stubborn get squeezed out

[Aug 7, 2015 10:36:25 AM EDT] smalltimeguy AQXP testing 5

[Aug 7, 2015 10:37:17 AM EDT] AndyRohrer AQXP remember the likes of PBMD, PTBI etc.. everyone thought they had run too far.. 180% gain is nothing… be careful on short side

[Aug 7, 2015 10:37:54 AM EDT] InvestorsLive cant warn enough thats why I have been a broken record – of course ther will be those who ignore it

[Aug 7, 2015 10:37:56 AM EDT] InvestorsLive but can’t help those

[Aug 7, 2015 10:48:38 AM EDT] InvestorsLive lots PMing me asking where I would short AQXP — most annoying PM I can get

[Aug 7, 2015 10:48:48 AM EDT] InvestorsLive how many times have I said leave it alone wait for lower highs etc

[Aug 7, 2015 10:53:56 AM EDT] InvestorsLive do NOT chase down the short AQXP for “FEAR OF MISSING OUT”

[Aug 7, 2015 10:54:08 AM EDT] InvestorsLive wait for rebound and stuffs and SET RISK

[Aug 7, 2015 10:54:10 AM EDT] InvestorsLive for more IGNORE It

[Aug 7, 2015 10:54:28 AM EDT] InvestorsLive this is another spot where people get trapped cuz they see 6.20-6.40s etc and then 5.90s and think UGH I missed quick short 5.90-6

[Aug 7, 2015 10:54:41 AM EDT] InvestorsLive I’d rather be shorting $5.50s after things settle w/ set risk than $6.20 and not know where its going

[Aug 7, 2015 11:09:32 AM EDT] InvestorsLive Guys until $5.50s over/under peak out — have a PLAN if trading it

[Aug 7, 2015 11:09:54 AM EDT] InvestorsLive repeating myself b/c I know people ignore — have a hard stop if you get emotionally invovled and trading it

[Aug 7, 2015 11:19:57 AM EDT] InvestorsLive if trading AQXP and used the stuff moves as entry nothing wrong w/ paying yourself along way allows you to add if pops again or add if snaps on pops — nothing wrong w/ re adding lower — until $5.50s peaks out still a ‘threat’

[Aug 7, 2015 11:23:35 AM EDT] InvestorsLive AQXP might get nice rally from those that didnt cover into the $5.50s suggestions and now wondering hmm “should I have?”

[Aug 7, 2015 11:23:47 AM EDT] InvestorsLive still many on toes imo so will act emotionally

[Aug 7, 2015 11:51:20 AM EDT] trader530 Cowen analyst commenting on AQXP , sees $1 Billion indication if they can get it thru

[Aug 7, 2015 11:53:55 AM EDT] InvestorsLive AQXP seems like the typical set up — trap shorts consolidate then come out with some bullish analyst talk

[Aug 7, 2015 11:54:27 AM EDT] DerrickJL t530 I love oyu

[Aug 7, 2015 11:54:29 AM EDT] InvestorsLive nice alert T530

[Aug 7, 2015 11:54:33 AM EDT] trader530 np

[Aug 7, 2015 11:54:42 AM EDT] PlutusChi ::up

[Aug 7, 2015 11:55:29 AM EDT] trader530 remember the analyst said the keyword “IF”

[Aug 7, 2015 12:00:47 PM EDT] AT09 awesome alert T530

[Aug 7, 2015 12:00:58 PM EDT] InvestorsLive AQXP can do $8-9 shorts are fuked will look all dips as opp

[Aug 7, 2015 12:05:17 PM EDT] InvestorsLive AQXP a dip watcher now any good washouts — as shorts will be eager to cover dips

[Aug 7, 2015 12:19:09 PM EDT] InvestorsLive AQXP so crazy getting stronger as it goes $9-10 para is HIGHLY likely and yes that’s meant to scare you away from shorting if you are new — make sure to lock in along way if you traded the dips long side as well

[Aug 7, 2015 12:29:58 PM EDT] InvestorsLive locked 1/3 AQXP

[Aug 7, 2015 12:33:21 PM EDT] InvestorsLive sold more 920

[Aug 7, 2015 12:34:47 PM EDT] InvestorsLive all done

[Aug 7, 2015 12:42:16 PM EDT] InvestorsLive AQXP shew still in go mode — can continue to squeeze out but I cannot buy dips unless a real good pull

[Aug 7, 2015 12:42:26 PM EDT] InvestorsLive will alert once I am interested for now looking for stuff to get short

[Aug 7, 2015 12:42:47 PM EDT] InvestorsLive and I was not just blowing spoke w/ the gap fill idea w/ the daily chart I posted – its possible 40 million shares traded low float — float rotation

[Aug 7, 2015 12:47:17 PM EDT] InvestorsLive those 9s still absorbing like mad on AQXP — key level = 880s

[Aug 7, 2015 12:47:31 PM EDT] InvestorsLive 9s over/under and stuff 880s for wash crack — until 9s give it up be super careful

[Aug 7, 2015 12:48:36 PM EDT] InvestorsLive posted the daily chart here if you missed https://twitter.com/InvestorsLive/ for the daily chart

[Aug 7, 2015 12:50:29 PM EDT] InvestorsLive all the 9 crack shorts getting squeezed out

[Aug 7, 2015 12:51:03 PM EDT] splendores 99% of traders in this room should stay away from AQXP long or short imo

[Aug 7, 2015 12:51:15 PM EDT] InvestorsLive ^^ yes sir

[Aug 7, 2015 12:52:41 PM EDT] InvestorsLive best to let it squeeze out lower highs there will be a time when it settles for traders to trade it

[Aug 7, 2015 12:52:49 PM EDT] InvestorsLive just cuz its an easy to borrow doesnt mean its a good short — thats why its up here

[Aug 7, 2015 12:58:11 PM EDT] InvestorsLive AQXP just filled hte dialy chart gap

[Aug 7, 2015 1:01:56 PM EDT] InvestorsLive when this squeeze ends after exhaustion candles

[Aug 7, 2015 1:02:14 PM EDT] InvestorsLive the wash will be big and fast — be READY if trading it with orders cuz it can slam $1-1.50 super fast

[Aug 7, 2015 1:02:26 PM EDT] InvestorsLive but any trades on it lock in along the way and use sizes knowing range = $9

[Aug 7, 2015 1:02:35 PM EDT] InvestorsLive and on that note = leave it alone like sandro Said

[Aug 7, 2015 1:03:24 PM EDT] InvestorsLive one other suggestion those just staring at it — take it off radar

[Aug 7, 2015 1:03:30 PM EDT] InvestorsLive so you can focus on other trades you may actually trade

[Aug 7, 2015 1:03:39 PM EDT] InvestorsLive very easy to capture everyones attention and miss some sweet lay up trades

[Aug 7, 2015 1:06:46 PM EDT] InvestorsLive draw a line on AQXP at 10.80-70 level you’ll see what needs to happen until then – anything is possible

[Aug 7, 2015 1:10:57 PM EDT] InvestorsLive now 11 battle field absorbing

[Aug 7, 2015 1:12:20 PM EDT] InvestorsLive like dat

[Aug 7, 2015 1:12:23 PM EDT] InvestorsLive fast buck

[Aug 7, 2015 1:13:29 PM EDT] InvestorsLive be awareof the relcaim

[Aug 7, 2015 1:13:50 PM EDT] InvestorsLive need to see 1070-1080 former support become resistance all washes = covers of partial until re-test and fails if it reclacims can just do it all over again – be aware

[Aug 7, 2015 1:14:09 PM EDT] InvestorsLive if fails lower highs will have a huge wash/snap

[Aug 7, 2015 1:17:11 PM EDT] InvestorsLive AQXP ba da bing so nasty

[Aug 7, 2015 1:17:17 PM EDT] InvestorsLive just FYI I have this whole thing recorded

[Aug 7, 2015 1:17:22 PM EDT] InvestorsLive as long as PC doesnt crash

[Aug 7, 2015 1:17:27 PM EDT] InvestorsLive will try to get it on youtube later

[Aug 7, 2015 1:19:06 PM EDT] InvestorsLive 890-850s = washout spot on AQXP if it stays heavy – make sure to lock in if playing it

[Aug 7, 2015 1:19:17 PM EDT] InvestorsLive longer it consolidates anything is possible can always re add

[Aug 7, 2015 2:06:29 PM EDT] InvestorsLive 950-960 key areas on AQXP for trend change

[Aug 7, 2015 2:09:23 PM EDT] InvestorsLive yes sir

[Aug 7, 2015 2:09:27 PM EDT] InvestorsLive AQXP

[Aug 7, 2015 2:16:38 PM EDT] InvestorsLive AQXP this is a big level if you draw a line back to 1230 1245 and 130

[Aug 7, 2015 2:33:21 PM EDT] InvestorsLive AQXP thinking it needs one more good stuff before anything — they’re trending it well likely lots of shorts still $1-2 away from their avg they can squeeze out — few more stuffs then yank = ideal

[Aug 7, 2015 2:41:45 PM EDT] InvestorsLive lotta shares coming out on AQXP offers block block block see if a 1020-1030 stuff and big vol

[Aug 7, 2015 2:43:34 PM EDT] InvestorsLive any para going to trade AQXP

[Aug 7, 2015 2:45:03 PM EDT] InvestorsLive usesd the para to start using 11s as guide

[Aug 7, 2015 2:45:18 PM EDT] InvestorsLive nothing for most trades will cover into washes ideally $1080-11 stuff w/ good vol

[Aug 7, 2015 2:45:34 PM EDT] InvestorsLive think they trapped a lot of people over the last hourthat need to be pushed out

[Aug 7, 2015 2:49:41 PM EDT] InvestorsLive here comes para AQXP

[Aug 7, 2015 2:50:43 PM EDT] InvestorsLive need to see big vol bar on AQXP otehrwise can keep grinding back re claimed 1080s reclaimed 11s so now everyone under water

[Aug 7, 2015 3:03:29 PM EDT] InvestorsLive YES SIR

[Aug 7, 2015 3:05:24 PM EDT] InvestorsLive AQXP = perfect stuff move and capture on this massive video file

[Aug 7, 2015 3:20:44 PM EDT] InvestorsLive $1.20-1.50/share here on AQXP have a plan along the way

[Aug 7, 2015 3:21:00 PM EDT] InvestorsLive covered bunch 930

[Aug 7, 2015 3:21:05 PM EDT] InvestorsLive ideally 8s on rest

[Aug 7, 2015 3:32:38 PM EDT] InvestorsLive nice covers AQXP — going to re add any para/stuffs again

[Aug 7, 2015 3:33:02 PM EDT] InvestorsLive 1020s is ideal but 10s fast moves etc — trade on ur own will just get crowded if i post each entry – be safe

[Aug 7, 2015 3:37:46 PM EDT] InvestorsLive covering washes along way AQXP around core

[Aug 7, 2015 3:43:52 PM EDT] InvestorsLive careful last 15 min guys if trading AQXP

[Aug 7, 2015 4:01:08 PM EDT] InvestorsLive not to bad only 778MB file

5 Comments

  1. Thanks again Nate! About to get to studying on this one. Cheers. Enjoy the rest of your weekend!

    Reply
  2. Got short on this as it retried the HOD area near 2:50PM. Not my normal type of trade but this name was captivating and decided to turn the screens back on after lunch on this one.
    Grear job with recap Nate. Just like on the DVD.

    Reply
  3. You're so money at interpreting price action. Talk to me about about your premarket disposition when a low float is starting to heat up with relative volume and trend. Bell rings and it retests premarket highs... any "tells" that decipher a gap and go from a stuff (and short)? so iffy lately. curios to get your veteran sentiment.

    Reply
  4. Great learning experience with this stock Nate! Excellent recap, and definitely enjoyed skimming through the 5 hour raw footage of this trade. Are you going to post one for 8/10 too? Even crazier day!

    Reply
  5. I would check the 5min also from time to time just to see if there was anything lining up with the 1min. The highs on the 1min looked shallow enough to base a trade on the 5min. Very interesting video. Thanks for your time. Time is very precious. You can always make more money, but you can't make more time.

    Reply

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