CSLR

[David Randolph]

This market is getting too speculative in nature, I sure don't like what I see in some small cap stocks.

Somebody picks one illiquid, small cap stock, pushes it up a bit and everybody jumps in the bandwagon, without any consideration for value. These people are gambling.

Samantha Stephens, on her personal log, was crying: "how do I find these stocks before they explode"? I think you can't find them on the previous day, unless you're the one starting the game

Let's take CSLR as an example. On Monday the stock traded just 4,000 shares with no price movement, so forget about catching it on any technical filter. No news out or anything on Tuesday. Yet the stock exploded on the upside, at one point it was up 350%. Closed up 212%, at $10.44.

The current market cap is 5,243,105*$10.44 = $54.7 M.

Just 12 employees, estimated revenues of $1.7 M in fiscal 2006 (revenue multiple of 32) and net income loss, so far this year, of ($2.5 M). Just $146,000 in cash and equivalents and negative working capital.

NO WAY this company is worth $54.7 M !

But, of course, timing is very important here. This thing won't go down 70% in one day (but it should !). But I guess in two months time it will be at $3 or $4 again.

Trading Plan:

After yesterday's run, it will probably be up 15 or 20% sometime today ... I'll short this stock at $12 - $12.20 if I get the chance and will close the trade at $8 - $8.20 today if I get the chance. No stop losses for now.

[David Randolph]

It's opening down 14%, probably we won't be able to short this one (the plan remains to short at $12 - $12.2). It looks like everything needs to be done within the day, push it and destroy it !

The game is ending with shorts coming in on the intraday when a high flier like this leaves the ground just for gambling reasons.

Probably in a few days, if you see a stock up 100% for no fundamental reason or previous technical signal, just short it, because the market is closing the window on these opportunities.

I'll keep away from them, too much short term in nature and extremely high risk.

[David Randolph]

Trading Plan:

After yesterday's run, it will probably be up 15 or 20% sometime today ... I'll short this stock at $12 - $12.20 if I get the chance and will close the trade at $8 - $8.20 today if I get the chance. No stop losses for now.

The high of the day was $11.90, missed for a dime

Anyway, you got the point ...

[raspi]

very good pick! However Interactive Brokers do not allow me to short it :-(

[David Randolph]

very good pick! However Interactive Brokers do not allow me to short it :-(

Thanks rspisek

The stock hit my buy to cover target today. It would have been a 50% trade in 2 days, but what the heck, missed for 10 cents

Lesson learned: give more leeway to stocks !!!