The Ultimate Guide: Short Selling Penny Stocks by Justin Bostwick - HTML preview

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Afternoon Fades

If you've got your eye of the perfect pumped/hyped penny stock and you're waiting for confrmation for a collapse based on the 5 min chart your odds are increased tremendously if this collapse happens in the afternoon. If your stock confrms its collapse in the morning and then subsequently does collapse there's a good possibility of a short squeeze and you possibly getting stuck in the middle of it. A lot of times the collapses happen right when the market opens and doesn't give that chance for the afternoon fade and that is O.K. Sometimes you have to trade what the market gives you and when the opportunity presents itself but if this happens in the morning be aware of the short squeeze. Understand that if you do see an afternoon collapse that it's a more reliable pattern therefore I'd put more money into your trade than if it was a morning collapse.