Newsletter

Good Evening Fellow Traders,

I hope you day went well. I have watched and scanned and researched plenty. TLAN has a “microscopic” float. You remember how well those have done for us?  We’re talking less than 1M in the public float.

Carefully read my ANALYSIS as well as the various SCENARIOS and TRIGGERS covered in the technical analysis BELOW.

Let’s start.

TLAN is our Pick for tomorrow and based on its volume pattern, we can see that this stock is on an upside swing that should give a great opportunity tomorrow to continue its move to the upside.

TLAN has really traded on relatively small volume, for all of 3 days. And now it looks ready to run.

It closed with strength today and that is definitely setting the pace for tomorrow. This looks like some end of day buying came in (possibly with knowledge of a coverage being initiated). While this bothers me sometimes, this time I don’t really care as it gave us a good indication on the stock’s behavior. One of the positive aspects of this action is that it moved up a good 0.03 on less than 300K shares in the last 2 hours. 

So that gives us some reference point for the trading tomorrow and this stock should move relatively easily as there is no resistance above. And as volume comes into this stock tomorrow we should catch a nice move.

As usual our Golden Rules and Gaps rules applies. But this stock is so new that it is much easier to read and there is a very small float, so this will help even more. It’s easier to read because the stop loss can be set at 0.095. Then the upside, we will know tomorrow, but if this stock can stay volatile a little bit, we should be able to catch some nice move

Here is the 60-minute chart that helps me establish my stop loss on this trade.

My Technical Trading Scenarios As Follows:

1) One possibility is that the stock opens very close to where it closed (0.13) and keeps going straight up. That would be done if selling doesn’t start at the open, which by the look of this chart, it looks like that’s what should happen (then use a 15Min chart to track the trend or a 5Min chart)

SIDE NOTE: I think, as my experience dictates me, that since it’s a new play, this stock will not be sold into right away, because this would mean this stock doesn’t have so much future. We see this type of opening selling (9h31-9h32) only if there is a big gap up and market makers try to close the gap. TLAN is just beginning…so this is adding to my conviction…. Remember this is not a bottom bounce pattern, this is the start of a move to the upside, and so we will handle this differently.

2) It gaps above 0.155 at the open: I would then wait for gap fill and look for the real buying-support to come at around 0.125-0.135 depending if shorts come in. But as you might remember when we had the move from 0.175 to 0.25 on XCHC last week, it went up at the open, pulled back and then bounced convincingly around 10:00. 

SIDE NOTE: if it has very strong volume and if it gaps at 0.15 it could still keep running, so what I do in this case is I break down my position into 2 or 3 parts and then I buy on increments…as it moves up…But it’s rare in penny stocks (I do that on larger stocks mostly..), but because it’s a very low float, I want to open you to this possibility….

3) As discussed above the stop loss on this is 0.095, you can possibly also use 0.10, which is based on the stock closing at 0.13 today. BUT AS I MENTION ALL THE TIME, we trade stocks not because we love them but because they makes us money, so I want to see upside action and positive action, meaning more buying than selling.

And as usual on stocks that start trading like TLAN, you want to position as early as possible on the day while respecting our golden rules and the different trading scenarios.

I will be sharing more information with you tomorrow morning before the open. So stay tuned. Start you research and Make Sure You Are Ready Tomorrow Morning.

If you have any questions, feel free to email me.

Sincerely,

Alexander K. Neumann.