How I Stalk Fast Trades in Speculative Small-Caps
We have an odd mix of action Wednesday, with higher oil prices weighing on some areas, while the positive earnings report from Super Micro Computer ($SMCI) is lifting some technology names. Breadth is running solidly negative with only around 41% of stocks in positive territory, as I write. New highs and new lows are close to even.
Once again, early strength reversed, and chasers were trapped. The biggest problem that I see is that pockets of speculative action are narrow. There is some hope that AI and chips have turned the corner and that earnings reports will help to deliver more sustained upside, but there is nervousness. SMCI is holding up so far and that is a good sign, but the Mag 7 is down 1% in front of the earnings news tonight.
I’m not doing much right now. I do not make short-term bets on earnings and I will often reduce positions in front of a report. You can always buy them back, and if I have to pay a higher price that is cheap insurance.
Stalking Fast Trades in Speculative Names
Three low-priced, speculative stocks that I’ve discussed previously are NeoVolta ($NEOV), FatPipe ($FATN), and AirJoule Technologies ($AIRJ).
NeoVolta makes home battery storage systems that store solar energy so homeowners can keep the power on during outages and reduce their utility bills. They are moving into a massive commercial market.
FatPipe sells network software that keeps corporate data connections running securely and without interruption across offices, data centers, and the cloud. It has been solidly profitable.
AirJoule has technology that pulls pure water out of the air, with applications ranging from water-scarce regions to data-center cooling and just announced a major joint venture.
They all have interesting stories and catalysts at work. These stocks are good examples of how I stalk some fast trades. They are thinly and erratically traded, but they move big when news hits and the technical setup improves.
I put names like this on my radar and check them every day to see how they are developing and if there is any news. When I like the price action I add some and will often trade in short time frames.
One of the most important issues if you trade these sorts of stocks is to not get in too big. I try to constantly stay in a position where I want to buy a pullback rather than curse it. Much of the movement is not meaningful, so it can be beneficial to be in position to buy when there is mispricing occurring.
The market is sinking as I write but SMCI is still holding up and that is an important indication of the mood going into the reports tonight. I’m not going to try to predict what will happen but I am looking forward to some increased volatility.
At the time of publication, Rev Shark was long NEOV, AIRJ and FATN.
