Hello Traders,
I wanted to give you a brief explanation of my SQNM trade.
5 min Chart of SQNM:
Do you see the death drop (where the arrow on the left is pointing) The stock took a huge hit in the morning retracing back to it’s 52 week lows of 4.02.
SQNM was also oversold on the daily chart:
Now what I look for:
- Technically oversold conditions (low rsi & Stoch)
- High short interest (meaning the percentage of shares that can be shorted)
- Is it nearing or forming a bottom formation
- Volume dry up (meaning the selling has temporarily stopped or slowed down)
This is where you manage your risk verses your reward. How much downside verses upside My stop was placed near the 52 week low of 4.02. Now the stock did touch 4 but it was brief and was quickly taken out by buying.
After watching the 5 min chart I saw that there was more buying than selling at this point. Once the stock started to uptrend higher (second arrow on the 5 min chart) you will see the shorts start to cover, 200ma of 4.17 broke, and then big short squeeze!
Just wanted to give you a quick low down on my trade of the day. Hope this helps.
Regards,
K.I.S.S
