We’re all looking for opportunities. Some of us are retarded, unable to decipher a good deal from a poisonous rat trap. Most of the people I know are illiterates when it comes to investing. Sadly, these people manage your money. They read magazines and concoct ideas after absorbing hours of financial media, pawning off the ideas of others as their own.
If you’re unable to read, like most investors these days, and can only depend on the “streams” of others, or charts, take note of what I am about to teach you.
This isn’t rocket science and I am not the only one doing it. We are talking about short squeezes, measured using proprietary technical analysis–via algorithms, overlaid on top a few simple data points.
In this case, the most important data point is the amount of shares available in the float. Stocks with less than 20 million shares in the float and considered to be “casino stocks” in the sense that their beta or volatility is extreme, thanks to the inherent nature of so little shares available for daily trade. Conversely, large float stocks, like MSFT, DIS and INTC, move with much less vigor because of their diversified shareholder bases.
After float, I want stocks that have very strong technical readings (trending up) and more than 15% of their respective floats are sold short. In an up trending market, it’s very dangerous to be short low flow stocks. Very simple, if RBCN can attract some natural buyers, via analyst note or news event, the people who are sold short may join these natural buyers in buying back their shares, adding tinder to the low float, causing the share price to spike. It’s a matter of supply and demand in the most basic sense.
There is no guarantee that these stocks will continue upward. But they’re certainly worth keeping a close eye on, possibly buying a few with tight stops underneath.
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