Pump-Watch: JUPM

UPDATE: I was curious about the availability of these stocks for shorting at Interactive Brokers. Yngvai was very gracious to send me this link: http://www.interactivebrokers.com/en/trading/SearchShortableStocks.php?cntry=usa&tag=United%20States&ib_entity=llc&ln, which allows you to check the availability of shares to borrow and if the stock is on the not sortable list. As of today, it says WPTE, JSDA, and EGT have 100K shares of each, and JUPM has 250K shares available. So maybe shorting Beacon Equity pumps is a viable strategy.

I’m trying to follow these pumps to implement a strategy talked about on the Green on the Screen blog:

I love finding pump and dumps and fluff press release and/or paid promoter stocks. You need to watch like a hawk cause when they come down they can fall super fast without warning,if you can catch the start of the fall they make great shorts.That’s what I’m always looking for, the short opportunity….”

Right now I’m focused on the Beacon Equity emails but will explore some others when I get the time. Their last one was sent out on Monday AM. I’m not sure what time zone they are in but my email says they sent it at 10:32am. I also think they must announce them in their chatroom at www.stockhideout.com/visichat.

JUPM from this week did not have a clean chart at all and had very low volume. Here are how the December Beacon pumps went:

The problem is, by the time I get the pump, most of the increase in price has typically already taken place, so shorting is all that is usually possible. All of them except for EGT went up for only one day, and then tanked. EGT lasted three days on a steady upward climb, but fell off a cliff ~ you could have actually went long on that one. Now to short these, many brokers like Interactive Brokers require you to put up $2.50 per share to short. So a 1,000 share position would require $2,500 of tied up trading money as collateral. With 100% of these stocks seeing tankage so far, perhaps this can be a real strategy. If you had theoretically shorted these all at their peaks and sold at close on Friday, you would of risked $1,340 for a profit of $1,340. Of course, you may have not gotten shares to borrow, you likely wouldn’t have timed the top and bottoms perfectly, and orders may have not been filled properly. Still, very interesting to consider. Here’s JUPM’s chart from this week: