This 6 month chart illustrates pretty well the issue. Volume has all but vanished from this stock and that creates huge upside and downside moves. The 3 month moving average is 59k shares but over the past few days as little as 3,000 shares a day have traded. When someone like me then buys 2,000 shares it pops the stock up…then the shorts come in and hammer it back down a few notches. It’s not an easy trade but I also don’t trade on margin on this particular account so unfortunately I can’t short.
When faced with this kind of choice I try to buy on a dip and a couple days later watch for the pop and unload. It’s a way to make a few bucks trading around a core position. In this case, around .90 cents. Buy it around .85 and sell it around .93 and you can make a couple hundred a trade.
I’m not saying to go out and do this, as with any investing there are inherent risks, but if you can take the pain short term it’s a great way to make quick cash.
