NXXI Potential 350% Profit vs. 20% Loss
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Would you like to become a master trader? Then Powerful Options Strategies are for you. We can see that the 15-minute chart provided helpful information in timing a short entry during point 2 on the hourly chart. Short positions were considered when prices first fell below the 20-period MA on the 60-minute chart, which occurred at point 1. But the 15-minute chart should be utilized to help us fine-tune our entry points for all the points. I want magnify what is going on in the 15-minute time frame during point number 2.
Penny stocks – those companies with shares trading at less than $1 – have taken on new life in the Internet age. While they are fun to trade, inherent in that fun is the danger of having those stocks manipulated by a group or an individual trying to “pump up” those penny stocks. This happens daily as someone will buy up hundreds of thousands of shares, manipulate their perceived value via blast emails and scam press releases, and then sell as the price increases with demand.
One high profile instance of this “pump and dump” type of behavior occurred last April and involved the holding company Nutritional Holdings Inc. (NXTH). NXTH compensated NBA star Shaquille O’Neal for his appearance on one of their newsletters with shares of their stock. Shaq could start selling 20,000 shares a day on the exact same day that the newsletter went out. Tim Sykes, wunderkid penny stock trader and hedge fund manager, called NXTH out on their move, and took some shots at Shaq and his team of lawyers in his statement.
This case is of interest because it is an exception to the rule; most pump and dump cases do not get called out because of a lack of public actors. Shaq’s involvement brought the whole case to a more public light, and provided a good opportunity for Sykes to show off his acute ability to sniff these kinds of things out.