The following stocks; MILV, JBII, RAYS, AMWI and HPCS are what I call pump and dumps. Shorting pumps can be a lucrative trading strategy and there are some experts out there like Timothy Sykes who specialize in it.
My newsletter is mostly long biased but I’m definitely up for quick profits on predictable collapses if you can time the dump properly. This isn’t a game for beginners though, you need to be an experienced trader if you’re going to jump into stocks like these long or short. Problem is, most of the people buying these stocks have the least amount of experience and I only meet them after they’ve been hit hard like one of my subscribers who lost $100,000 on the SFIO scam. To learn how to short penny stocks read this blog post I did recently.
Heck, I’ll even trade them long first during the pump phase, sell for profit and turn right around and short the stock. Why not take advantage of the blatant manipulation to the upside and then benefit from the predictable dump that’s sure to come after? As a matter of fact, I did exactly that on JBII for some really nice profits seen here.
If you’re looking for a visual example of a pump and dump you could have swung long, sold for profit and shorted, take a look at a this recent beauty below – Mistral Ventures Inc. (PINK:MILV).
But MILV has come and gone. Other pumps I think could dump in the short term are listed below. Unlike normal watch lists they’re not deserving of a full report so I’ve only included my thoughts on the charts.
JBI Inc. (PINK:JBII) – Four for four on this one shorting twice and going long twice. (Read more)
Raystream Inc. (OTCBB:RAYS) – I called RAYS short just three days before it collapsed over 50% and I’m pretty sure another dump is coming soon. (Read more)
Amwest Imaging Inc. (OTCBB:AMWI) – not hard to see what I like here haha!!!
Oh and you’re in luck. Like a bad infomercial I’m tossing in a bonus short call on HPC Pos System, Corp. (OTCBB:HPCS) which apparently was ‘supposed’ to be promoted Wednesday by a big newsletter. I hear a lot of traders were speculating on the promo and loaded the boat Tuesday only to find out after the close that the projected promoter canceled the pick. So let’s see, no pump means no bids…factor in a bunch of front loaders and it’s safe to say someone’s looking at a bad day come 9:30 a.m. EST Wednesday. Maybe they get lucky or maybe not but you can see why this isn’t a game for beginning traders.
How would a trader find out that a company was going to have a web site promote their stock?