Sunday, November 1, 2009

Tim Sykes' RODM trade, Oct 23, 2009

RODM day chart Sykes trade
Here is a trade I found myself scratching a head to explain: a value trade on a penny stock? RODM had an earnings report on Oct 22 which apparently was a disappointment. The next day, the stock opened with the gap and Tim bought it, but apparently the stop loss was so tight that the position was closed with a loss (bought at $5.27, sold at $5.23, according to TimothySykes.com. While a small profit could theoretically be made intra-day on that day, the stop-loss proved beneficial in the long run as the stock kept moving lower. What do we learn? Apparently, an opening with a gap in penny stocks is big enough an indicator to someone with Tim's experience, so it's worth risking a small stake.

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