@CTUCyberGroup Lesson: 3rd Day Rule
Today was a fairly usual day in the CyberGroup Live Trading Room. We had some great trades early and a few that ran into the afternoon. $XOMA was a great trade almost all day, very slow easy stock to trade which kept making higher highs. $GOGO was a great short almost all day, some that couldn’t short it played the options. Some other great winners were $PLUG $IRWD and $KLIC
Some of you will remember the stock we went over yesterday $OGXI. It was a pharmaceutical stock that got crushed over one of their drugs not doing well in trials. As most of my students remember, with pharmaceutical companies sometimes they just never come back. One of our favorite trades is called bottom fishing, where we will trade a stock long after traders come in the next morning and start to average down. As you can see in the 2 day chart this stock still has not came back. Something to keep in mind is the 3rd day rule. In most cases after a stock gets crushed, institutions will come in on the 3rd day and help redirect the stock. As I explained though, depending on drugs and other variables in the pipeline, sometimes this does not happen with pharmaceutical stocks.
One thing I can tell you is $OGXI will be on our watch list tomorrow!