Look at Avenue Therapeutics Inc. (NASDAQ: ATXI). It spiked over 300% in less than 24 hours on March 1…
Unfortunately, I missed this trade.
Sometimes I miss the first big move. But that’s OK because I know that one spiker means others are soon likely to follow.
I was able to run a simple scan and find the next two +100% runners. And the best part is its simplicity — there are only three factors.
The other day I taught my students — in the classroom and over a live stream — how to build it. Here’s a photo…
If you missed the lesson, keep reading. I explain it all right here…
My Scan
During after-hours trading, my computer alerted ATXI as a big mover. It already gained 100% by the time evening trading closed.
When a stock spikes that big, I know that more volatility will follow.
Plus it was a biotech company. There was a period of a couple of months where all I did was trade biotechs.
That was back when COVID was a bigger deal and there wasn’t a vaccine yet. But now China is experiencing a resurgence. Here’s a headline from March 18, 2022, about it …
I had a pretty good feeling there would be some other spikers.
After running my scan, a few tickers popped up. And out of that list, two stocks caught my eye.
GBS Inc. (NASDA: GBS)…
… and ECMOHO Limited (NASDAQ: MOHO)…
Both of them ran at least 100%! Here’s how I found them before the move…
Sympathy Plays
I’m capitalizing on a market phenomenon called ‘sympathy plays.’
That means when there’s a big runner in the market (like ATXI) sometimes other stocks spike as well.
The only problem is … which stocks? This is what I scan for…
#1 Float Size
This is the number of shares available for purchase on the public market. Usually, the stocks that spike big have lower floats.
For my purposes, that means a float less than 100 million.
A low float means low supply. When demand increases for something with low supply, the price skyrockets. That’s just economics.
But you’ve gotta pay attention to things like liquidity. If the float’s too low, I risk getting stuck in a position. And that’s dangerous.
Make sure the float is at least a few million.
#2 Percent Change in Price
Next, I look to see which stocks with a low float are also running.
For my scan, that means stocks that are up at least 20%. Anything less than that is weak movement.
#3 Price
Stocks that trade at a lower price are more likely to spike higher.
Most of the big blue-chip stocks only move a couple of percentage points a day. That’s not enough volatility for me to profit from.
Since ATXI was the first big runner. I looked for stocks in a similar price range — below $1.
Here’s what my scan looks like…
Using the Right Scanner
There are tons of scanners out there. Most of them have options for the same factors.
I like to use StocksToTrade because Tim Sykes developed it specifically for day traders. I get all the scans I need in one place and in real-time.
Plus it includes broker integration and trade alerts. If you’re interested in this niche, here’s a two-week trial.
But if you’re really serious about trading, consider studying with me. I host live webinars every week and I have a lot of archived content for you to consume.
My students’ time is important to me. I’ve gotta make sure you’re willing to put in the work.
See you in chat,
Roland Wolf
Editor, The Wolf’s Den
