Day Trading News & PR’s
I’m back!! Today was a great day in the markets locked up $7,265.06 in just 2hrs on 4 trades on 1 stock. The stock was $COOL, and this was STRAIGHT off my Gap Scanner and morning watch list. It really doesn’t get much easier than this. Let’s break down the setup and how this played out. I found $COOL on my Gap Scanner at 9:15am. Each morning my day starts the same way, I start scanning the market looking for strong setups. This means I’m looking at the top 10 biggest gappers and checking them against my list of criteria for home runs stocks. That means low float, breaking news, and strong daily chart.
This morning my day started like any other, checking the gap scanners. The stock $COOL was 2nd to highest gapper on the gap scanner (see below). It was gapping up 26% on 3500 shares of volume and has a float of 1.8 mil shares. This stock has the float required for home run potential, next step is figuring out the news. From the watch list, I posted the headline, which was a merger agreement. In this agreement they are acquiring/merging with another company. In some merger agreements the company is coming into the fold and is not going to continue to be publicly traded. In this case it appears $COOL will continue to be the face of the company.
$COOL 1.8mil share float gapping up 32% Headline: Majesco Entertainment Inc. and PolarityTE, Inc. Enter Into Merger Agreement
I checked the daily chart and was able to identify that as long as the price could get above 4.32 (the 200ema), there was lots of room. Having now confirmed low float, strong catalyst, and strong daily chart, this stock met my requirements for A quality setup. What made it even better was the strong pre-market chart. We had a pre-market bull flag holding just under 4.50. As soon as the bell rang I jumped in with a long position of 12k shares at approx 4.46 average. Using this position I was able to quickly generate a big win as the stock squeezed up to $5.00. I then added to this position, scaling in and scaling out, through moves up to $6.00. This stock surprising did not trigger a circuit breaker halt even though it was up over 90% intraday.
In total, I was able to capitalize on this opportunity and generate over $7k in profits on my $70k trading account. That’s 10% intraday account growth. This is the power of day trading stocks with strong catalysts. The reason this worked so well was because of the news. When we see stocks on the scanners that look good but don’t have breaking news, they often don’t have as much follow through. While this is true in most cases, stocks like $DRYS have proven this wrong which means even this rule of thumb can be broken from time to time. I remind traders that even the best setups only work 70% of the time. That means we have to always be prepared to cut our losses quickly.