HEES update

So, HEES didn't have a big climb in the premarket like PPCO did yesterday. There was a pretty wide gap between the buy and sell orders for HEES and it was settling around $29.00. It had a small quick jump to $29.20 right before the bell and hit as high as $29.48 a minute or so into trading before it quickly fell and hit lows around the $28.81 level. It would have been very tough to short at $29.48 but if I tried I may be been able to get in at $29.30 or so and been able to cover very quickly for a good profit.

So why the difference between HEES and PPCO? Why did PPCO climb nearly .70 cents right before the open and HEES only climb .20? Maybe it was the industry (pharma vs construction), maybe it was the price of the stocks? Either way, both could have been profitable trades if timed correctly. I will certainly be looking on Monday to see if either of these 2 types of movements can be seen again and traded. Basically, if the stocks are holding early and then make a big run right before or after the bell look for a psychological price (an even dollar amount like when PPCO went up to $22.95 before it came down, or $29.48 like HEES today) and short it.

March 30th - HEES

Cramer's second stock pick tonight was HEES H&E Equipment Services Inc. This is a good opportunity to watch what this stock will do in the morning. It is at a similar price point as today's PPCO.

Closing Price: $27.64
High After Hours: $29.05
Percent Increase from close to high: 5.1%
Price leveling off point after hours: $28.78
Percent Increase from close to level off point: 4.1%

So if you recall (or read below) PPCO went over $22 after the mention and then fell below $22. Here we have a stock that goes above $29 and then falls below $29. So I want to see if this will climb to the high $29 range around 9:20am like PPCO went to $22.95 and then fell .50 cents on the open. We also had a similar percentage increase after hours with PPCO and HEES. My plan for tomorrow will be to watch and only short if it climbs late in the premarket trading. I might then explore doing a trailing stop on the cover buy if it drops enough. That way I can lock in a gain and push for more with no risk. This can only be done during regular trading hours, and in the past I had always covered during the premarket.

PPCO Update

Well, I shorted PPCO at $22.20 early this morning like I said I wanted to....and boy it was a scary ride. Much to my surprise this climbed all the way to around $22.95 in the premarket!! I'm not sure why this climbed so much higher then last nights close after the Cramer mention. I wonder if Cramer's begging to stop after hours trading has encouraged people to do their research that night and wait. Then, this morning they saw it climb in the premarket...didn't want to miss the boat and jumped in thinking it would climb even higher. Well, pretty much right at the open the price fell hard and fast to the $22.40 range....so I was still under water and a ways away from my $21.91 buy to cover price. I kept my cool and was confident that the price had to fall but decided that I had better put my cover price closer to the nice round $22 number...so I set at $22.01 which covered around 11:15. So, if I had have waited to short closer to 9:20 this morning in the $22.90 range it would have been a much smoother and faster short. I will probably take a step back the next few shortable picks Cramer has to see if they do the same thing....that is climb much higher then the after hours trading. I will also take a look at the percentages. This only went up 6% after hours....so maybe it will be safer to stick to shorting picks that go higher then a 6% gain.

So...another semi-successfully short...not a huge profit but something to keep an eye on.

Update: The stock went as low as $21.62 today. I hate to hold shorts too long...but looks like some more patience would have paid off. But I would much rather have shorted at $22.90 :)

March 29th - PPCO

Cramer picked PPCO Penwest Pharmaceuticals Co. The stock closed at $21.10 today and went as high as $22.39 after hours, an increase of just over 6%. The stock has since leveled of to around $21.95. I see this opening above $22 in the premarket, and would consider an early short at around $22.20 if I can short that high. I think this would then easily go back to the $22 level and lower like the after hours movement. I would look for a dip of .30 cents from early premarket highs. I will keep my eye on the news of this one and make sure there aren't any FDA approvals in the morning like DXCM!

OO vs SFD

Interesting chart to look at for OO and SFD. I didn't play either of these, but take a look at how they both reacted in a similar pattern for the first half hour or so of trading, just at different percentages.

March 28th

Cramer's first pick was SFD Smithfield Foods Inc.. This trades on the NYSE so I can't trade after hours. I will keep my eye on it, but this wouldn't be something I would normally consider shorting.

Something really funny I noticed too. during Cramer's first pick, he was talking about pork (the meat) and thats when he picked SFD. But on the caption below it said PORK in caps like it was a stock pick, but it wasn't. The stock shot up $1.51! Then when people realized it wasn't a pick it went right back down. So much for Cramer's begging for people to stop buying after hours without doing their due dilegence! People are buying stocks that he isn't even mentioning!!!

The second pick was OO Oakley Inc. Cramer really played with some peoples head on this pick. He started talking about it and it almost sounded like he was joking and was just doing a lead into another pick. If you look at the 30 minute chart right when he mentioned it you can see. Normally there is one big jump up, followed by a more normal trading range. This one went up a little, then a bunch more, then came down big and then back up. After all this, it trades on the NYSE, so I can't trade after hours (or premarket) so I like to stay away from these. Also of note, this one barely went above its daily high after the Cramer mention (only .28 cents above sor far).

Cramer later went on to talk about cheap natural gas plays. He picked 5 stocks and said they are all on "sale". I wouldn't short when he picks a basket of stocks like this since who knows which ones people may pay up for. Secondly, I don't think shorting natural gas is a good idea because on any given day natural gas could go up in price (I know since I am long CHK) and determine the stock price and take away the control from the Cramer buyers.

Cramers first pick was ANDE Andersons Inc. It is too rich for me at nearly $70. Amazingly someone paid $71.95 after hours before it almost instantly leveled off at $69.70. Would have been one heck of a short to sell to someone at $71.95, but who could have known and been that fast eh :)? Its amazing what people will pay. I wonder if people who can hear Cramer's show while they are waiting on the phone for the lightening round (but aren't allowed to trade since they apparently have to agree not to) set sell orders......or short sell orders really high and sucker someone in who does a market buy (or really high limit buy) right when Cramer mentions it? Because really they aren't trading until its mentioned on TV......anyway, just a thought.

Cramers second pick was from Australia. Since I can't trade or even track it....I will move onto the next.

Doesn't look like theres a 3rd pick tonight...and I have to run now! But he's bashing after hours buyers and is talking about short sellers! He is on the rampage! He is trying to kill my system! Hopefully not many people aren't watching tonight!

Can't post the charts from today either...will try later.

Update - DXCM SNTS FTEK

Well I’m an idiot….for 2 reasons. First, I decided to short DXCM because SNTS dropped a lot from Friday’s after hours close and was hanging around $6.80 this morning down from $7.21. I saw a big jump from the Friday after hours close of DXCM and thought it was people paying way to much so I set my order for 300 shares short. I failed to notice that DXCM got FDA approval this morning for their Diabetes monitor. So, even though I set my short sell at $22 and the price was only around $21.50 at the time, my order was suddenly filled, I assume once people noticed the FDA approval. So, I was underwater for some time at the $22.50 range and then trading slowed. It started coming down to the $22.15 level so I re-set my buy to cover at $21.92………..or so I thought! I had actually messed up the order and typed in $22.92!!! Of course my order got filled right away at (Luckily!) $22.24. So I lost nearly $100 after commissions :( Now you may wonder if the buy I wanted would have hit…and yes…it would have. The low went to $21.75. Now, the stock is climbing once again and is over $23 now.
Update: The stock went as low as $20.64 later in the day


As for SNTS and FTEK: SNTS would have been probably a better play today after all (hindsight being 20/20). It went as high as $6.92 and went to $6.67, easily hitting my .10-cent drop in price target. FTEK hit a high of $15.96 in the pre-market and hit a low of $15.24 just after the regular open. Again, easily hitting my .20-cent price drop target, assuming I sold short at the right time.

FTEK:

SNTS:

March 24th - DXCM FTEK SNTS

Well Cramer made up for a bad week of shortable picks by giving 3 potential shorts!

Here are the details from the after hours movement:

DXCM DexCom, Inc.
Regular Close $19.81
High of $21.00 after hours
Low of $20.80 after hours
Leveled off at $20.92
6% increase from level off

FTEK Fuel Tech NV
Close $14.86
High $16.00
low $15.52
level off at $15.60
5% increase from level off

SNTS Santarus Inc.
Close $6.25
Close after hours $7.21
15% increase from close

Now, for me the obvious short would be SNTS since it had the highest increase. I could potentially short 1200 shares, but would probably look for more like 1000. I would then look for a .10 cent drop to cover at for $100 profit.

If I can't short SNTS, for DXCN I would look for a .20 cent drop on probably 500 shares. I would also look for a .20 cent drop on FTEK on 500 shares as well.

An interesting note. Cramer himself, in a recent attempt to stop people from buying up big after hours told people that if he were at his hedge fund still, he would be SHORTING people right then because they are paying up too much!!!! Isn't that all the proof I need that this is a winning low risk strategy??

March 22nd - SVI

Cramer has once again picked 2 stocks that don't trade on the NASDAQ. Having said that his first pick was SVI, Services Acquisition Corp. International . It trades on the AMEX and closed at $9.84 today. It went as high as $11 after hours.....an increase of almost 12% and has since leveled off around $10.60. Since this is on the AMEX I can't trade it after hours, but I am getting pretty fed up of having no stocks to trade! So, I will take a look at this one at 9:30 tomorrow morning and see where it is at. If it is anywhere near the $11 range I may attempt to short it and look for a .20 cent drop. Now, I deposited some cash into my account and my buying power has increased, but it appears to have increased too much, so I'm not sure if it will be corrected tomorrow, so that means I have no idea how much I might be able to short. Now, if the stock doesn't come close to $11 I will stay away. I'm not going to short something just for the sake of shorting something.

His other pick was Weight Watchers WTW, but is too rich for my blood.

Cramer is doing his lightening round now, so I will update later if he has a third pick after that.

March 21st - Nada (not a stock code...means no good shorts)

Cramer's first 2 picks (MCO, ALOG) were far out of my price range for a short trade. They were both in the $60 range and since I would only be able to short about 100 shares of either, there would need to be a significant drop in share price for this to be profitable, so its not worth it in my opinion. Plus, MCO falls into the same problem as ANGO the other day. MCO leveled off around $69.45 after hours, but the daily high was $69.75, so Cramer's recommendation didn't even take it past its high for the day.

So, 3 days in a row with nothing I can even try to short. Well, on to Wednesdays show!

MSPD update

Well MSPD looked like a typical Cramer pick in terms of price action the next day. The chart shows a steep decline at the premarket open from $4.02 down to a low of $3.76. For a cheap stock this is a pretty good decline. Then, a spike right at 9:30am to $4 again followed by another quick drop to $3.76 within the first half our of regular trading. Not to mention a drop to $3.80 within the first 5 minutes of the regular market. Once again, this shows people pay up right at the premarket open and the 9:30am regular open. Maybe I should be looking for a broker that will let me short under $5!

March 20th - Nothing again! :(

Well, Cramer must be on to me.....2 shows in a row without a shortable pick ;) . His first stock pick tonight was an IPO that isn't even out yet! Now, being Canadian, I was a little intrigued by his Tim Horton's picks (the coffee and donut shop of Canada). He says it could easily go to $28.00 but isn't a very good long term play because there isn't much growth. From what I understand, they are expanding slowly into the United States so maybe Cramer is missing the boat on this one? I have a friend of a friend who is a manager of some sort for Tim Horton's so maybe I will have to ask some questions to confirm this :) So, maybe if this stock climbs to $30 it could be a good short option at that point. Could be a lot like UARM Under Armor that hit $40 shortly after its IPO and quickly fell to below $30.00.

Cramer's second pick was MSPD Mindspeed Technologies Inc. It closed at $3.30 today and went as high as $4.65 after Cramer mentioned it, an increase of almost 41%. It has since calmed to around $4, which is still an increase of just over 21%. Anywhere over $4 would be a short if you ask me.....except of course I can't short stocks below $5!!! On the off chance this hits $5 by noon tomorrow I would short it, but it seems unlikely. I will post the chart tomorrow to see if I can spot the traditional Cramer effect or not.

Finally, Cramer picked TYL. This stock trades on the NYSE so I am not going to follow it.

March 17th - No shortable picks

Once again I couldn't watch Cramer tonight at 6:00pm although I did read his update. From what I read, all of his picks were from the NYSE, which I can't trade after hours so I don't bother following these ones.

One interesting note, ViroPharma's VPHM a Cramer pick from February 28th (which went as high as $21.08 during regular trading the next day) took a big hit today and closed at $10.855. These type of Cramer picks tend to add some fuel to the fire for shorts. I just hope that too many of these don't scare off people from bidding up his picks ;)

BRCD update

Firstly, I was unable to post my thoughts on Cramer's show on Thursday night because there was an error with my blog host....it wouldn't accept any posts! Oh well.

Well I didn't get up early enough today to short BRCD. But it looks like it could have been a very profitable trade. Just look at the chart! This went up at premarket open like I was hoping for. So I could have easily short at the high $6.20 range (assuming there were shares to short of course) and and taken my .10 cent for a quick $100 gain within the first half hour of the premarket. And if I was to be gutsy and do 2 buy to covers like I mentioned before, the stock easily went down low enough, hitting its low for the day at 9:55am at $5.91. Of course hindsight is 20/20 since I wasn't actually watching this happen...only looking at the chart now. But once again, another prime example of the "Cramer effect" :)

March 16th - BRCD

Well I couldn't watch Cramer at 6:00 tonight so I only read the update, but it looks like I missed a good one. BRCD BROCADE COMM SYS closed at $5.76 tonight and went as high as $6.80 after hours, an increase of 18%. Apparently Cramer said right near the end of his show that people shouldn't pay over $6.00 for the stock. Now, the stock closed after hours at $6.18 and I don't think people are too happy about that comment! If I get up in time tomorrow (since I'm off work! Yeah!) I might short a 1000 shares anywhere above $6.20 since I think it will go up above the $6.18 close for all those people that didn't hear his $6 limit. I would then look for a .10 drop but might consider buying to cover in stages. Maybe 500 for .10 cents and the next 500 for maybe another .5 or .10 more. We shall see.

SLXA Update 2

Well, SLXA hit a high of $10.00 and has fallen to as low as $9.71. I didn't try to short at this point since I was rejected earlier due to lack of shares to short, but once again, it came down at least .20 cents and would have been a nice gain.

So, as mentioned in one of my previous posts, this stock seemed to peak around 10:15am and had its drop. Some other picks peak right at 9:30am. If anyone has any insight as to why there might be a difference I would enjoy hearing it. One of my theories is that it depends on the price of the stock. If its under $10 then there will be a lot of demand at the open and drive the price up for longer. Higher price stocks then might peak out nearer to 9:30am since people can't afford as many shares. Just a thought.


Interesting note: This chart looks a lot like the charts for AVNX, MATK, FNSR, and INTX for the price movement in the first few hours of trading.

SLXA Update

Well I had my short order in at $9.70 this morning and was rejected due to lack of shares to short! And now the price has dropped to my .20 cent profit point of $9.50 at 8:30am. Well, even if I didn't get to actually short, it just gives another example that there is a quick buck to be made. I will be curious to see where this goes the rest of the day. Based on previous Cramer picks, this could run upwards until the 9:30am open and then maybe have another fall. Guess I will have to wait for some more picks tonight.

March 15th - SLXA

Well Cramer had one good shortable pick tonight. The stock SLXA, Solexa Inc. closed today at $8.25. Now, Cramer mentioned this one after 6:30pm and my brokerage only lets me trade until 6:30pm. This one closed at to $9.65 after hours a 17% gain. I could see this one trying to hit $10 since it is a psychological number. If it hits $10 I may short it. I may even short early in the premarket depending on how the price holds up. With my buying power I would look to short 600 shares and look for a .20 cent drop in price for a $120 gain. We shall see what happens tomorrow.

My Shorting Rules

Seeing as how Cramer is doing his anniversary show tonight and not making any major picks, I figure its a good time to list my general rules:

My general rules for shorting a Cramer pick are as follows. As I do more research these rules will most likely change, but here is what I have for now:

• Never short something Cramer says "could be the next Google", or "the Google of insert country here". These tend to run up big for a while. They also come down at some point, but not in the same way as normal picks.
• Never short a big well known company (at least not based on a Cramer pick). Lets say Cramer picks Apple one night and the stock goes up when he mentions it. Apple is a heavily traded stock normally, so a big increase is not abnormal and traders may let it run more. I like to short smaller companies he picks that not everyone knows about yet. I think people are more compelled to buy stocks that they think are the next hidden gem of a stock. This makes them bid up too much and make stocks ripe for a fall.
• Set your limits right away. Know which price you want to buy to cover at and set a stop loss in case it runs up. Even if a stock is dropping really fast and you think it will go lower than your preset profit price, stick to your original buy price. Be happy with your gain and move on to the next day.
• Take a look at INET Bookviewer INET is a routing service to the major US trading venues. This will tell you the current buy and sell orders for trades going through INET. This gives a pretty good idea of the supply and demand at any particular time, but not all trades go through INET so be careful. Level II quotes will also give this data for all trades, not just INET, but normally at a cost. I like to use this to set my buy to cover price. I look to see if and where there are a lot of buy orders at a certain price. I then tend to put my buy order 1 cent higher if it is near my desirable profit target.
• Only short Cramer's main picks. He normally has 2 or 3 major picks. Don't short his lightening round picks. These don't get the same pop in price as his main picks do.
• Don't short a Cramer pick when the stock in question is near a major event like earnings, or if news is expected to come out in the near future. Although this news could cause a sharp decline, there is a good chance it could cause a sharp increase. So the easy thing to do is stay away.
• New Rule Don't short a Cramer pick where the price after he mentions it doesn't go above the high for the day. It may also help to take a look at the recent price trend. In the case of ANGO, the stock had come down from near $30 to $22 in a few months. This stock just seemed to be looking for an excuse to run. The stock hit $24 during regular hours trading during the day Cramer mentioned it and fell to $21.95 by the 4:00pm close. Then after Cramer mentioned it, it only went to 23.25...... .75 cents lower then the high earlier in the day. So the stock was already trying to run up and Cramer's recommendation seemed to give it the big push it needed.
  

ANGO Update final

Well, after the move ANGO made today I am glad I didn't short. As mentioned in my first update the high early in the morning was around $23.68, but the high for the day was $25.90!!!! That's almost an 18% increase from yesterday's close and it didn't stop for a break either if you look at the chart below. So this would have been a very bad quick short.

Now I have a few thoughts as to why this may have been the case. Firstly, as mentioned, the stock had a high of $24 yesterday, so its not hard to believe it went to $24 today. The stock was also at the $27.28 level back in mid-February. So, this stock has been in a downtrend and so maybe this Cramer recommendation helped the stock find its bottom. Meaning that the stock needed something to stop the falling price, and Cramer's recommendation was it. Also, the company reports earnings next week and from what I read people feel they will do well.

On the Yahoo! message board I saw some brave souls trying to stick out their short sales (1 poster at $23.00 right where I had my order in for) and are confident that this will come back down and be profitable for them. But for me, with potentially good earnings coming out, this would be far to risky for me. Plus I have limited buying power, and can't sit on a losing short for too long before getting a margin call.


AVNX on the other hand had a more typical movement after a Cramer mention. It went down early in the premarket for what would have been a nice .10 cent gain for a cheap stock. This was not shortable of course since it was under $5.00.

ANGO Update

Phew! So far looks like a very good thing that my short order at $23.00 for ANGO didn't go through. The stock went only as low as $22.90 in the premarket and only a low of $23.01 in regular trading! Its sitting near its high for the day at $23.68 right now.

New rule established. Don't short a pick where the day high is ABOVE where the stock price trends after Cramer mentions it. Remember the day high was $24 yesterday and the people that bought off Cramer's recommendation only took it to the $23 level. This could still come down later in the day, but its just a good safe rule to implement I think.

March 13th - AVNX and ANGO

Well, Cramer picked another stock under $5.00 today AVNX. Avanex Corp.. This one closed at $2.30 and hit a high of $2.75 after hours...an increase of almost 20%. So not shortable for me right now and I don't see it going to $5.00 by tomorrow. I will watch and see if there is any sort of trend with this and if there was any significant drop. The stock closed after hours at $2.66.

Cramer's second pick was ANGO. AngioDynamics Inc . This one closed at $21.95 and went as high as $23.25...an increase of almost 6%. Now I actually had a short order in for 250 shares at $23.00 but got cold feet and cancelled. The reason I chickened out was because the high for today was $24! So I thought.....why short it at $23.00 if it was able to get to $24 today without Cramer mentioning it?!?! This put up a huge red flag for me and I was happy my order didn't go through before I cancelled. So, will this one go to $22.70 tomorrow? If it does, shame on me. If not, then I have found a new rule to add to my strategy. The stock closed after hours at $22.95.

MATK and FNSR Update

Well, MATK went down early in the premarket this morning. It went as low as $34.20 in the premarket, a .52 cent drop from the fake short point. So I would have easily hit my .30 target. So at 200 shares I could have made $60.00 (minus commissions).

The stock then shot up right at the opening bell to its high for the day of $35.06 followed by a low of $34.07 at around 10:20am. This could have been another excellent short in hindsight. I wasn't really watching the stock at this point so I didn't do another fake short. I also don't really think about shorting the same stock twice in the same day. I like to take my money and move onto the next day. Also, day trading rules must be considered. I am only allowed to have a buy and sell order for the same stock in the same day a maximum of 3 times in any 5 day window. So ideally shorting the day before and covering in the morning will avoid this.

FNSR was another story. This one went up to $5.00 around 10:00am much to my surprise. Now it didn't stay there long so it would have been tough to short (due to my restriction of only shorting stocks above $5). But, if I were able to, and shorted my full amount of 1500 shares, the price did drop to a low of $4.83. A nice .17 cent gain at 1500 shares would be $255.00. My target was a .10 cent drop and I would have been happy with that. Luckily though I didn't/couldn't short after hours the on Friday since it would have been around $4.60. This would have caused a loss and most likely my stop loss would have kicked in to get me out with a limited loss.

This one sort of scared me though. Like I said, I don't think people realize how much they are paying up for the stock when the stocks are so cheap. At the high of 5, that represented an increase of 14.4% from the previous close of $4.37.

Also of note I like to notice that the high was $5.00 which is a psychological number to investors (any round number is really). Many could have set $5.00 as their sell point to take profits since it is a nice target, thus leading to the decline.

Well, Jim is on in 10 minutes! Lets see what he has for us tonight! Hopefully he isn't on vacation this week!

March 10th - MATK and FNSR

Cramer had 2 picks tonight that were "Short Worthy" in my opinion. I only have access to after market with stocks that trade on the NASDAQ and have only limited buying power so I also typically ignore stocks that are over the $30-35 dollar range. His first pick was MATK. Martek Bioscience The stock closed at $33.09 the day Cramer mentioned it and went to $34.83 after his mention, an increase of just over 5%. I set a "fake short" at $34.72 of 200 shares. I didn't actually short this one because I'm not too keen to hold a short over the weekend since anything can happen. Cramer also mentioned that he thinks they will have 2 big contracts coming their way very soon. Not to mention that this stock has a short interest of 33% of the float already. This means that this stock currently has a lot of people shorting it already. So 1/3 of the float (the total number of shares the company has outstanding) are currently held short. Visit ShortSqueeze.com to see the stats for MATK and its short position. The data on this page, from what I understand, is delayed, as the short data is only updated once a month.
And finally, this was in a price range that lets me only short 200 shares max, so the profit potential is slim if I am only looking for a .30 cent drop in share price. Still, I look for this to drop early on Monday for what might have been a quick buck. I will update Monday.

Click here to learn about Short Squeezes.

The second pick was FNSR. Finisar Corp. This stock closed at $4.27 the day Cramer mentioned it. Unfortunately I can't short this once because my brokerage won't let me short stocks below $5 dollars. Its too bad because the stock went up over 8% after hours (to $4.62) and my buying power would allow me to short 1500 shares. With so many shares (for me, not for others with more investing money I'm sure) I would look for about a .10 cent drop in price to make a quick $150 dollars. Now, if this stock were to run up in the pre-market to $5.00 I would consider the short, but I honestly don't see that happening Monday morning. And I'm not really interested in the stock after the first day it trades after Cramer mentions it. I still like to watch these stocks that I can't short to see if the shorting theory holds true. In my research Cramer mentioned another <$5.00 stock (VTSS) and it went from $3.37 to $3.15 the next day during regular market hours. Again, not a huge drop, but for a stock this cheap you could control a large short position and make decent gains. I would like to point out a few things though. First, Cramer rarely mentions stocks this cheap. I think he might be afraid of it running too much and people getting burned. Not to mention, stocks are normally that cheap for a reason (not to say they can't rebound). Secondly, I think people react differently when the stock price is so low. I don't think they see a problem paying a dollar more then the closing price because they still think its cheap. But for a stock so cheap, paying up a dollar is a HUGE percentage. I would be afraid that these could be far more volatile because the large number of shares people could afford. Well, we will see tomorrow :)

March 9th Pick - OSIS

Cramer's pick on March 9th was OSIS. OSI Systems Inc. The closing price the day Cramer mentioned it was $21.19. After mentioning it, it went to $22.70, an increase of over 7%. Now I didn't short this one. I was watching it after hours and did a "fake short" at $22.60 of 300 shares. Now I normally look for about a .30 cent drop to set my buy to cover price and the premarket the next morning saw a low of $22.21 and the regular market had a low of $22.06. So on the 300 shares I could have made $90.00 (before commissions) if I stuck to my .30 cent target or as much as $162.00 if I could have hit the low of the day to cover. The high for the day and close was only 22.41 during the regular market. So worst case scenario was a profit of .19 cents x 300 = $57.00 (minus commissions again of course).

By looking at the chart, here is another example where there was an inital drop at the premarket open, followed by a slight increase for the 9:30 market open, and followed again by a fast decline right after the open. My theory is that there are 3 main buying points. People who buy Jim's picks as soon as they come out of his mouth, people who research that night and buy in during the premarket at 8:00am the next morning, and those who don't have access to trade in the after hours and premarket that wait till the market to open at 9:30am. But why do some picks rise at 9:30am and why do some fall? This is one of the many things I am trying to determine and when I figure it out...I will let you know!

Wednesday March 8th - INTX

So 1 of Jim's picks on March 8th was INTX. Intersections, Inc. The stock closed at $9.10 the day that he mentioned it. The stock then proceeded to go up to around $10.83 in the after hours market......a 19% increase! So I took this opportunity to short this stock because I felt that the increase was way to high and way to fast. So I shorted 500 shares at $10.45 that evening around 6:20pm. This was my first overnight short. I have only shorted twice before and both times I shorted in the premarket the next morning and covered soon afterwards. Holding short overnight worried me a bit because who knows what news may come from the time the market closes to the open, but I lucked out. I set a buy order right after my short sale for a modest .20 cent profit point ($10.25) to be execucted GTC (good till cancel) and for the Extended and regular market. My buy to cover order was filled around 10 minutes into the premarket for a quick $100 gain (minus commisions). Not bad for only holding the stock for a few minutes of acutal market time if you ask me! :)

As you can see from the chart there was an early decline in the premarket followed by an increase all the way up until the opening bell at 9:30 followed by another drop. At this point My trade is done. Although there is another rise an fall later in the day, I personally find it too risky to continue to trade after the initial increases.