SKYQ update & new small cap trade plan

Good afternoon — Jason Bond here.

So when we look to trade gaps on small stocks under $10 headed into the weekend there’s a few reasons it could work.

1. Short interest (goal 10-30% of the float)

2. Big move up Wednesday or Thursday

3. Shorts pay high borrow fees so they cover on Friday (typically)

4. Range on the chart to resistance keeping traders interested

5. Low float and small market cap ($100M or less)

Wednesday’s idea opened Thursday below the previous days close so swing traders like myself often kill the trade but monitor and come back to it.

Had Wednesday’s idea, SKYQ opened Thursday above $$2.60 it’d been an indication that the move would continue. After some profit taking and increased short interest it’s right back to $2.50’s so the same rationale applies.

Friday morning we want to see this open at or above Thursday’s close and that move to $3’s is still in play. Range is nearly $4 so upside could be big if it works like it did Wednesday. Stop loss remains $2.40 on a reentry with a goal of 10-30% upside into the $3’s, taking some at round numbers or in this case $3.

A new idea Thursday into Friday is AZI. Definitely a bigger company and less short interest but I suspect that’ll have increased today (Thursday) on this price action.

AZI had good news, heavy volume and range is from $2 - $3’s if it carries. It has a history of big moves and is often volatile on day 2 of the fresh news. With short interest up today it could carry to $2.50, ½ off the table and see if it goes for $3.

Stop loss on AZI would be in the $1.90’s using the base from the middle of June.

More on these names Friday and hope to see you in the chat room.

Eat, sleep, and trade.

Jason Bond

Disclosure: I’m not an investment advisor.