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Edgar Ambartsoumian
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Visit to gain more insight about the author and his trading services, which combine fundamental analysis with technical to gauge an initial trading position size by assessing worst case scenario standard deviation, which ultimately what drives profits home. In layman's terms,... More
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  • Don't Believe The Hype, Sell This Loser
    What really baffles me, is that even companies that are listed on NASDAQ are beginning to behave like OTC stocks, one of them being a micro cap such as Ocean Power Technologies Inc. (NASDAQ:OPTT). Amateur investors get sucked into a surging price per share due to intense promotions, without really diving into fundamentals or growth prospects.

    Recently a company was mentioned by National Inflation Association, a website created to scare novice investors that doomsday is coming due to hyperinflation. In reality its a marketing scheme to gather subscribers and then promote small cap companies.

    Broadvision, Inc. (NASDAQ:BVSN) surged more than 400% since December, after thousands of subscribers were bombarded with e-mails stating the company was the greatest thing since sliced bread. The only great thing about this $146 million e-commerce company is its assets, and the fact that it carries no long term debt. But truth of the matter is that it doesn't have any net income either.

    Company has been burning through cash and propping up their losses by showing positive cash flow from their investing activities (which has also been falling). Despite a stable revenue stream quarter over quarter, Broadvision's net loss increased from a loss of $1.64 million to $1.81 million in the past few consecutive quarters.

    Besides my humble opinion, other well known short sellers have also noticed the hype. Tim Sykes, a well known millionaire and hedge fund mogul who turned $12,000 into $2,000,000 trading penny stocks, knows an opportunity when he sees one. He has been making thousands a week shorting BVSN, realizing its 400% surge was not warranted to begin with. BVSN's short ratio rose from prior month's 131,000 to currently 279,000.

    If an investor is seeking for a turnaround story with low debt that is improving its income year over year, then Crocs (NASDAQ:CROX) or Fastenal Co. (NASDAQ:FAST) would definitely present better opportunities than the aformentioned.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Feb 21 3:53 PM | Link | Comment!
  • Making Money Before Earnings Day Not After
    Jim Cramer always preaches how an investor should purchase equities or add to existing positions after the earnings release, not before.  Very true, however, if you are a short term trader, a strategy I found useful is to trade in and out of a stock 2-4 business days before the earnings release.  Why not make a short term profit before deciding to go in long term after the earnings report date?

    At times, the "prior to earnings" volume increases and the PPS move is pretty indicative as to how the earnings will turnout, but not always. I can't count how many times there was a major sell-off few days prior to earnings, then company beats analyst estimates and bears scatter into the woods before the opening bell the next day.  Opposite also holds true, a perfect example would be Apple's (AAPL) last quarter earnings results.  From October 13th to October 14th Apple rose from $408 to $422 a share with subsequent 5 million shares per day increase of volume accumulation before tumbling after missed earnings.  I did make a gain on that strategy trade, but went against my discipline and held some shares through earnings day by putting all my faith on the tech giant's consecutive and flawless earnings history.  Enough about me, let us take a look at some names that report this week and the possible gain that one could have captured in trading prior to earnings. 

    CompanyAverage VolumeEntry Date/PriceExit Date/PriceGainEarnings Date
    Dollar General (DG)1,310,000Nov. 29 $39.01Dec. 1 $40.64 4.17%Dec. 5
    Analogic Corp. (ALOG)65,742Nov. 30 $52.29Dec. 2 $56.64 8.32%Dec. 8
    Bank of Montreal (BMO)906,525Nov. 29 $55.20Nov.30 $58.76 6.45%Dec. 6
    Casey's General Stores (CASY)233,071Nov. 30 $51.04Dec. 1 $53.99 5.78%Dec. 7
    Auto Zone Inc. (AZO)269,562Nov. 29 $323.05Dec. 1 $334.22 3.46%Dec. 6
    SAIC, Inc. (SAI)2,120,000Nov. 30 $11.77Dec. 1 $12.14 3.14%Dec. 6


    Nobody knows how the earnings will turn out, but when the insiders and investors consensus cheer with optimism prior to reporting, you may detect that in robust volume and change in PPS, as well as accumulation/distribution line.  Scan stocks that report earnings in a couple of days from now and watch them like a hawk until earnings day to get a good practice on the strategy, but remember to stay on sidelines during that conference call.  

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Dec 08 9:35 PM | Link | Comment!
  • Trader's Almanac: October 4, 2011
    For Traders Who Have Full-Time Jobs
    Large Insider Trading (Buys): OPK $8.83 mill; VHI $5.66 mill; BFS $6.19 mill.  
    New High: SMBL QDEL
    Unusual Volume: JYN ICI 
    Analyst Upgrades: LVLT
    Top Gainers: TSPT OPTT SGS INUV
    Oversold Condition: CAST XUE 
    For Chartists: Technical Analysis Patterns
    Channel Up: SMB  MAXY
    Reverse Head & Shoulders: MFW  KCLI
    Ascending Triangle: PRA HFBL
    Large Insider Trading (Sales): GNET $10.7 mill; TIF $28.6 mill;
    Unusual Volume: ACMR GSP
    Analyst Downgrades: RVBD
    Overbought Condition: AMAC HGIC
    For Technical Analysis Chartists
    Channel Down:  STEL COHU
    Head & Shoulders: MIND TPX NKBP DAR
    Descending Triangle: STAN  VNET PM

    Date Time Release Impact For Actual Expected Prior
    Oct 04 10:00 AM Factory Orders Aug -0.2% -0.1% 2.1%

    EUR/USD                 1.3291
    5 YR TREASURY     0.9
    10 YR TREASURY   1.8
    30 YR TREASURY   2.77
    Oct 04 3:55 PM | Link | Comment!
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  • Love Apple's surprise u-turn. Bought 5 $520 april calls for 2K, sold them for 3K in 5 minutes. What a great day.
    Mar 6, 2012
  • Wow, Apple march call option holders got wiped out.
    Mar 5, 2012
  • Can anyone explain how a retail investor could've bought Yelp at $15/share at a private placement? day's low was $22, was it not?
    Mar 2, 2012
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