What Makes This Trade Great: Capitalizing on Overextended Stocks

What Makes This Trade Great: Capitalizing on Overextended Stocks

Oct 18, 2024

Hey traders, Barrie Einarson here with another edition of “What Makes This Trade Great.” Today, I want to break down a really interesting trade opportunity that many of us took advantage of, and how AI came through big time. Let’s dive in.To Subscribe: https://go.trade-ideas.com/SHQ
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VTAK: A Huge Early Run and a Perfect Short Setup

This morning, I had my eye on VTAK, which had a massive run early on. For those of us who were watching closely, there was a great opportunity to jump in on the way up. But as we all know, those big runs often come with a downside, and that’s where our AI tools really shine.

At around $1.39, the AI gave us a signal that VTAK was overextended and suggested a short position. Now, before this stock even showed signs of pulling back, it dropped to $0.89, giving us a solid 28% gain as of the current price.

The Challenge of Finding Shorts on Low-Float Stocks

One of the key things to remember about trades like this is that not every broker will have shorts available for low-float stocks like VTAK. If you’re using a broker like CenterPoint or Cobra, you probably had access to the shorts and could take advantage of this setup. Unfortunately, not all brokers offer the same opportunities. For instance, I personally didn’t have access to shorts on Interactive Brokers for this trade. But if you’re serious about shorting these low-float stocks, switching to brokers like CenterPoint or Cobra might be something to consider.

AI’s Edge in Picking the Highs

This isn’t the first time we’ve seen AI pick off these low-float stocks at the highs. We had a similar situation yesterday, where the AI flagged another overextended stock, and it delivered great results. It’s becoming a reliable tool in identifying these setups before they unravel.

So, if you’re looking for ways to improve your trading strategy, particularly in these volatile, low-float stocks, AI might just be your best friend. And don’t forget, having the right broker can be a game changer.

Have a great weekend, everyone, and I’ll catch you Monday morning with more trade insights!