Remember, these are short term holds. In most instances the gains won't hold so always take your profits when the opportunity presents itself. My next perfect stock choice is one that hit its 52 week low today, but bounced hard off of it. Several factors could propel this stock to fast gains for investors/traders in the next couple of days. CIT Group , Inc (CIT) is the next perfect stock.
CIT Group operates as the holding company for CIT bank that provides commercial financing and leasing products, and management advisory services to the small and middle market companies worldwide. Right now the company is struggling and bordering on bankruptcy. I know. You're trying to figure out how in the world a stock that hit it's 52 week low today and is bordering on bankruptcy could be a perfect stock?
Rumor/News:
This afternoon, a report was released that CIT was involved in talks with the federal government regarding the receipt of aid, which would allow the company not to fail. Despite, what the general public would have you to believe, small business is the backbone of this country. Because CIT services so many of these companies, the government is afraid of the economic consequences if it is allowed the fail. It has been reported that the talks are quite far along. This kind of news can cause a "V-shape" reversal in a stock.
Also, the financial sector has been taking a beating the last month or two after a sizable runup off their lows. People are now finally beginning to believe that this recent drop has been a bit overdone. Meridith Whitney, who has probably been the financial sector's biggest bear, came out today with something actual positive on a least one giant member of the group-- Goldman Sachs. That change in sentiment spearheaded a strong reversal in most all financials. The rally is likely to continue for the group particularly if Goldman's numbers are as strong as most people believe.
Technicals:
Let's take a look at couple of charts from CIT. First is the 3 month chart.
As you can see the stock has pretty much dropped from $4/share to $1/share in a little over a month. You can also see that the volume has increased significantly and the selling has accelerated the last couple of days. The action looks an awful lot like shorting to me. Now look at the 7/13/09 intra-day chart:
After hitting the low early in the morning the stock rose 20%-30% throughout the day. This type of action is typical of a stock reversing from its lows. With news accompanying the reversal, it is highly probable that the rise will continue.
Short Squeeze:
According to shortsqueeze.com, there are over 50 million shares of CIT being shorted. With heavy institutional ownership, that represents a large portion of the float. As the stock gains in price, particularly with news of a government bailout, the shorts will cover. The squeeze will cause a huge pop in the share price and a lot of money could be made the next couple of days because of it.
Institutional Buys:
Based on the massive selling the last couple of days, there will probably be news released of some institutional selling in the next couple of days. However, there are still some mutual funds that have invested large sums of money in belief that CIT will recover. RiverSource Investments LLC, bought 12.7 million shares between March 31 and June 30, bringing its stake to 44.3 million, according to a July 10 regulatory filing. Other buyers in recent months include Fidelity Investments, Brandes Investment Partners LP, Vanguard Group and Wellington Management. Also hedge-fund manager Edward S. Lampert of ESL Investments (better known for his controlling stake in Sears Holding Corp) bought shares in the struggling company. All the big money buyers does lead one to believe that a recovery could be on the horizon.
Conclusion:
CIT ended today's session at $1.35/share and ended after hours trading up another 25% at $1.70/share. In my opinion, this is just the beginning. Ideally, you'd like for news of progressing talks to leak throughout the week without any significant details released. That would allow the stock to achieve a snowball effect thus crippling the shorts. Personally, I'd like to get out before a formal deal is announced and then re-evaluate afterwards. To often, government aid is dilutive or non-beneficial to the shareholder. It may not be the case in this instance, but I'd prefer not to take any chances. I can't quite predict where the stock will go, but I feel confident that there is still a huge opportunity to make some good money. Just be sure to take your profits. News, technicals, short squeeze potential and institutional buying makes CIT the next perfect stock.
Card,
ReplyDeleteI really do appreciate your posts, but youmay be giving yourself too much credit. Many times you quote the stocks closing price the day of your post, but the stocks have typically run significantly after hours and are close to their peak when you post. When the market opens, it may be at its peak, but typically crashes throughout the day(with the exception of PIR.) This is another example. For CIT, you may quote and give your self credit for a run from 1.35 to 1.77, however it was already there after hours and we are witnessing the crash and burn now. Many of your picks have taken that path.
In my opinion, for a stock to be perfect, it actually has to have some value. Pure market timing is impossible. For proof, let us know how much you have made with your picks. I guarentee if you bought you lost on many.
jsd, if you'd like to do the math yourself, look at the opening price the next day or pick a point 30 minutes after the opening price after I've posted and figure out the percentage gain at the peak. You'll find that it's still 60%-80% gains on average (not even counting PIR). Come with the facts if you're going to point out a flaw. I've also stated before that I use limit sells usually based on 50% gains because that keeps me from getting too greedy. I think you can figure out that you can do pretty well with a similar strategy.
ReplyDeleteLooks like you may have spoke to soon on CIT today. It's probably not a good idea to prejudge a stock just a couple of hours into the trading day. It makes you look like a basher. Honest criticism is welcomed here, but bashing is not. Clearly the verdict is still out. I'm just willing to stick my neck out on a call. Sometimes you get it right and sometimes you don't. But I haven't got this one wrong yet.
Sorry Card. I do apologize. I certainly did not mean to bash. I must have been mistaken and probably hold on too long in general. I will be following you closely but just wanted your opinion on how your picks have fared since most seem to have been down after 24 hours. It is just hard to know which to sell after 30 minutes of the open.
ReplyDeleteYou are apparently very very good at market timing. You certainly have a tremendous following here and I hope you keep up the good work.
Sorry again.
Facts: 46% of stocks selected by you are penny stocks and/or bankrupt companies. The fact that four of your 11 stock picks took anywhere from 2-26 days to reach their peak, while others took less than an hour lends little credibility to your aim to "achieve 75-100% gains in a short period of time."
ReplyDeleteThe day after you picked TTNP it was in the 1.80 range. Your post read "Because the stock has already had a nice run, you could gamble and hope for a pullback closer to a $1.00, but don't count on it." See how quickly it fell towards a dollar and stayed there.
GHII, a penny stock which does not trade after hours, was .13 when you got it Friday May 1st, but when others tried to grab it at the open May 4 it was at .20. Marking it as a 100% gain at .26 is misleading.
Same goes for MBRX. You called the Friday close price of 36 cents in your post that Saturday weekend. It opened Monday at 88 cents. By stating in your blog post "right now MBRX sits at .36 a share," you are misleading your investor readers.
LFBG was a penny stock pump and dump, pure and simple.
I feel you have lost proficiency in providing posts with sound technical data thrown in the mix. While I understand emotion plays a large role in this market, I think this blog's initial intentions have warped from "bring a stock to light which has the biggest potential, backed by sound research and technicals" to "find the next pump and dump after it's already been found."
I do have a few favorite posts. NVAX, CHGY, and obviously PIR, all provide sound technicals with little exaggeration of the expected outcome. This is only friendly criticism, please take it for what it's worth, and please make this a more respectable blog in the future, for your readers' sake.
ReplyDeleteThat was my point but I just didn't have the energy top get all the data. Even your favorites NVAX and CHGY were dicey for a while and you had to hold a while to get a pop. Of course, if every stock was timed and held and sold perfectly profits would be there, but I can say that about any stock in the market given the volatility.
ReplyDeletejsd, I didn't mean to come across so defensive, but I felt like I was being unfairly attacked. I hold no grudges. No stock goes straight up forever. That's why I believe a stock is perfect only for a finite period of time. That period of time could be a couple hours, days, weeks, or months. Every stock is different. That's just my belief. We just have different views of perfection.
ReplyDeletespade847, you last comments have some very inaccurate statements that I must clear up.
- You must have completely misread my post on TTNP. I wrote about it when it was in the $1.30s. I clearly stated in the post that I thought it would go to $1.70 and not much higher unless some other things occurred. It went to $1.75. Please re-read that post.
- MBRX opened 6-8-09 the Monday after I posted at 65 cents and not the 88 cents you claim. It then quickly ran to $1.15. That's a nice gain anyway you look at it. See historical pricing link below as proof.
http://www.google.com/finance/historical?q=NASDAQ:MBRX
- GHII opened on 5-5-09 the day after I posted at 16 cents. It even hit 15 cents at some point that day according to the historical prices link below. 2 weeks later, it hit 26 cents. Again, over 60% is not bad gain.
http://www.google.com/finance/historical?q=OTC%3AGHII&start=30&num=30
Look guys, I don't have a problem with some criticism, but it's unfair to try and bolster your argument with inaccurate statements.
It's okay if you don't like the "penny stocks" I may highlight. I will point out any stock that I view as a potential money maker whether it's a penny stock or not. The PIR's of the world don't come around everyday. A money making opportunity is a money making opportunity in my eyes when it comes to the stock market. I choose not to discriminate against a specific type of stock.
Remember, these picks are just my own personal commentaries on stocks that I believe could make people money quickly. If you chose to take that commentary as investment advice and you profit from it, that's just a bonus. I just don't believe I should be held responsible or seen as a fraud for other people's "buy and hold gone wrong".
Card,
ReplyDeleteNo one is calling you a fraud here or holding you "personally responsible," so there is no need to get defensive. In the end it is up to everyone to perform their own DD before buying any stock. However, one begs the question (as I think another reader on the previous blog post had asked) what distinguishes this blog from HOTOTCS.com or any other penny stock alert newsletter? Do their stocks move up? Certainly, and in far greater percentages than 75-100%. Do they stay up for longer than an hour or two at most? It's very rare.
As you've stated in your other blog detailing how to find news, finding a fast moving stock is EASY. The hard part is finding one that stays up for a few days, and that takes some skill, some sound research, and some depth in understanding what the company has to offer its shareholders. I have only seen that a couple times here and am kind of let down as a reader, but in no way am I calling you out as a cheat or fraud. I only provided a simple reader's suggestion for future blog posts; in the end, it's YOUR blog, choose to do what you like.
Stock got halted. Could be good or bad. Most seem to think it'll be good. We'll see!
ReplyDeleteCIT Group denied a Bailout...
ReplyDeletehttp://www.washingtonpost.com/wp-dyn/content/article/2009/07/15/AR2009071503305.html?hpid=moreheadlines
Looks like I got this one wrong. No excuses from me. You win some, you lose some. That's why you never invest more than you can afford to lose in a stock.
ReplyDeleteCard,
ReplyDeleteCan you PLEASE now do a deal on IGNT for me? PLEASE? You aren't going to see me saying, "Looks like I got this one wrong." Why? One win has NEVER made a champion, as much as one million dollars has NEVER made a person rich. But, winners win at everything, as much as losers lose at everything! I also don't . . . MY RECORD IS FOR REAL CARD! Okay? The 1400% increase for IGNTs low ball selling price of seven cents is also real. PLEASE give this one a try! PLEASE.
Juggernaut,
ReplyDeleteIGNT is also very interesting to me. Could you please explain why this stock is so appealing to you?
Card,
Do you think some sort of aid or financing deal will be announced before trading of CIT resumes? If not, where do you see this going?
Are you saying that this is the perfect stock to short? Down 74% this morning..
ReplyDeleteGood one aroramax! I deserved that one.
ReplyDeleteI sold at the open and have moved on. When you get it wrong you take your lumps and look for the next winner. I bought ABIO this morning at $2.75 as a bottom feeder play. Hopefully, I can recover some lost chips. I liked the fact that it was finally off the reg sho list, seemed to be coming off it's bottom and was a name that was still fresh in the minds of traders. It looks to be working pretty well thus far though it's still early.
Fisharea51, I don't think I really answered your question. Unless something dramatic happens, 40 cents looks to be the max anyone will get out of CIT. I hear people talking about trading a bounce in CIT, but that's very risky particularly at this stage. There are better plays available and other opportunities to recoup will come in the future.
ReplyDeleteCard,
ReplyDeleteI told you I wasn't going to e-mail you again, so I won't. Why on earth you don't listen to me is totally and completely beyond me. But, I can tell you why most people DO NOT.
Most people LOVE doing what everyone else is doing, because they HATE being the odd ball. They don't like it when others think they are 'uncool.' MANY of those dreams I gave to you, I gave to no one else simply due to the fact that they are too adolescent or immature to think I am not crazy. If they do think I am telling the truth or I am sane, they then go and ask their immature friends what they think. All in all, you get a snow ball effect out of it, and it just turns into a mess! So, I am done e-mailing you. But, I will give teachings on your blog site from time to time.
Why?
YOU are one cool dude Card. So, listen. . . the baltic index keeps rising. . . but my stupid shipping stocks are NOT following. Why? I guess they aren't 'cool' right now. Like Buffet says, "Long-term investing is like a voting machine, and short-term investing is like a popularity contest (or fad)."
This is so true!
If all you ever do is follow the news Card. If all you are after are the quick flips, then you will sooner or later get burned as in the case with CIT. You don't deserve to lose Card- EVER! Okay? You do have undefeated teams in sports at times, but it never seems to last. Why?
I have known individuals who go undefeated in whatever endeavor they choose an entire lifetime. . .boxers. . wrestlers. . etc. But, NOT team sports.
Why?
Investing isn't a team sport my friend. It never has been and it never will be. It is WHY you end up with the giants like: Soros, Buffet. . . and no one can figure out HOW they did it. . . or do it.
I tell you how.
They don't THINK or DO what the crowds on 'crack' are doing, but they dare to be bold like a LION. They dare to see like a eagle.
Anyway Card, I enjoy your blog. As far as my picks go, they aren't for the faint of heart. Awhile back, I bought LDK at 36. It went up to about 50. . . it then went back down to the 20s. ALOT of my friends SOLD it back then leaving me thinking, 'I guess I am all alone in this investing deal. It is just too damn hard to EVER get anyone to listen to me!'
I doubled down on LDK at that time. . . two weeks later. . sold at about 70. So, I say, "It's NOT what you invest in, but it's HOW you think. Give a gold medal to someone who hasn't earned it, and they may just go out and sell it. Give a gold medal to someone who has earned it, and they will NEVER sell."
It is just a way of thought that's all.
THE BILLIONAIRE PLAN to be coming out in a year or so. If you guys enjoy these writings, then you will really enjoy that book!
Chow.
Now that pharmacy pick is what I call the perfect pick! Just look where that thing used to be trading at. Card. . . let's hear it! WHY is that the next perfect stock? I would simply say it used to be trading in the zillions and it is now reversing course. But, you are the smart one here. So, let's here it! This one looks like a real good one even an idiot like me would invest in. Good pick Card. . Good pick! (They aren't facing bankruptcy or something are they?)
ReplyDeleteWhen I saw ABIO spike, I put in a limit sell at $4.99 hoping it would trigger. Just my luck, it stopped at $4.88. Hopefully, we'll have a slow grind to 5 bucks instead.
ReplyDeleteLook's like CIT's coming back a bit (relatively speaking of course). Congrats to those with the patience I didn't have.
ReplyDeleteI'm trying to gauge if ABIO is done for the day or if they'll be lunch time or late day surge. I sort of feel that they'll be at least one more push before the day is out, but I just don't know when it'll come.
ARDM.OB looks like it may be 2 day mover. There was an FDA approval associated with the company today, but ARDM is saying that a PR won't be issued regarding it until tomorrow. It's not moving at the speed of ABIO because of the number of shares, but it is moving none the less.
ReplyDeleteLooks like ABIO is done for the day. Tommorrow, I'm expecting it to pullback. I'm going to monitor it for a few days. If I begin to see a more sustainable rise begin to happen after the pullback, I might buy it back and put it in my longer term portfolio.
ReplyDeleteWow Card, you seem to be able to time stocks almost perfectly. How do you know exactly when to sell? Previously you mentioned the 50% gain limit order but you seem to have decided not to use it on ABIO? You probably didn't do that on PIR either. How do you know which to sell at 50% gain before it crashes and which to hold longer waiting for the big gains. Congrats on timing ABIO perfectly, and since you said you sold CIT at the open(it is said to have opened at 1.66) you did pretty well here avoiding the big crash. Congrats!! Very impressive. For me, most seem to be muc h higher when I try to buy after your post(they seem to have run a great deal after hours) and then crash soon after in the morning. Very similar to the emails I get from the penny stock companies. To me they seem like pump and dumps but obviously they are not since you have timed each one perfectly and have gotton out before the crash.
ReplyDeleteAny help would be great
The only time I won't really use a 50% preset sell limit is if I can clearly see a spike happening. I'll roll the dice then. Based on my experience, if you aren't good with Level II or don't use any fancy software, preset limits are the way to go. Start out with a 25% gain preset limit sell, gauge how much much money you may or may not be consistently leaving on the table, then, adjust accordingly. That would probably be my advice.
ReplyDeleteRegarding CIT, I wasn't fortunate enough to catch that $1.66. I took my lumps just like most everyone else. ABIO made up for a large percentage of those losses though. That's why you sometimes need a short memory in dealing with the stock market. No need to pout about losses you won't get back. Just find the next winner. If you don't get too greedy, you'll probably gain a lot more than you'll lose if timing seems to be your only issue. Good luck!
You'll probably get a post from me on NPWS this weekend as a heads up. After the news this morning, it could be huge. I entered at 11 cents first thing this morning.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteCIt up almost 100% today on some financing of 2-3 B talks from GS or JPM
ReplyDeleteCIT up almost 100% today?
ReplyDeleteCard invested in it and it went down!
He then said, "You win some, you lose some."
Yet, Buffet says, "Rule #1: NEVER, EVER lose money. Rule#2: Never forget rule #1."
So, here it goes. . .
Card is going after the minows, but he should be going after the whales. But, in order to catch the truly big fish, he has to work as a team. He can't do it all by himself.
I want you on my team Card. You write a good blog, and you seem to really have some good insights. I also am still sticking with IGNT, becasue I always stick with a stock, until I have gotten my whale.
Peace.
Then again what sounds too good to be true usually is. I am sure IGNT is just one giant scam like all of the other penny b.s. Anyway, I am long on OCNF, and I say, "Don't EVER trust anyone, until he or she has first prove him or herself."
ReplyDeleteChow.
sorry proven. . .
ReplyDeletenot prove
I changed my mind on posting about npws. I still think it will do well in the short term and I've kept my position, but I'd like to be more certain that they'll try to do more than a reverse split to increase the share price.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteWow, CIT got saved after all. I guess I really would have looked like a genius if I had recommended it in 40-50 cent range. I'm not sure how favorable the terms are, but if it's decent, the short covering will last for 2 or 3 days minimum. Either way, I have to stay away. I don't want to deal with the "wash" rule.
ReplyDeleteCard, NRIFF has been steadily climbing.. it's an easy money-maker
ReplyDeleteIt's interesting you bring up NRIFF again aroramax. I got into it today. The technicals are awesome and the setup is impeccable. If I do a post, I promise to give you all the credit.
ReplyDeleteAll we need is for some of the HGSI people to take some profits and jump on board. I agree, easy money here!
Did any of you get in on QSGI today. I've watched it all day, just knowing if I bought it, it would tank and I'd be left holding the bag. Low and behold it goes all the way to 5 cents for a 1000% gain on nothing more than a bottom feeder technical play. Unbelievable!
ReplyDeletejuggernaut's favorite pick , IGNT is in talks with some IBank for a possible buyout....any more flavor to this story juggernaut ???
ReplyDeleteand now the sotck rallies as well....way to go juggernaut
ReplyDelete