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A (hopefully) little thread about $NOVN. I see a lot of tweets from traders (many of them new) who are frustrated & a little bewildered about what happened with this one. It was doing so great, made an awesome move to 0.80-plus in AH yesterday, but basically no follow-thru today
So what happened? Why didn't we get the "dolla holla" & so forth? This is where you have to step back sometimes & take a look at the bigger picture. This is also why I always trust the charts & PRICE ACTION above EVERYTHING ELSE. So on $NOVN chart, check out the 6/15 volume:
Kinda hard to see, but volume on 6/15 was 126.63 MILLION. Tons of shares changing hands in an absolute frenzy & the price action reflecting that. Now notice the last time this level of volume happened: 3/10/20 (122.06 mil). Also notice the same price action: Dramatic spike...
Then sharp drop next day, even after a fairly strong opening. Similar action on 3/20, pretty heavy volume (74.04 mil) into the weekend, then one fairly solid day (3/23), then the inevitable sharp drop. Keep in mind that past can be prologue many times with these stocks. Now...
What am I getting at? Simply this: More often than not, these dramatic spikes in price WON'T LAST. It's rare to get a multi-day face-ripping rally when a stock has ALREADY MOVED UP NEARLY 100% in a single trading session. That's exactly what $NOVN did yesterday if u include AH...
session. I first bought the bulk of my $NOVN shares on 6/8, then added more over the next three trading days, avg was about 0.47-0.48. I watched it skyrocket yesterday on insane volume, and figured that if AH session was piping hot, there would prob be a more serious cooldown...
the next day, seeing as how the stock basically ran roughly 100% in one day (incl AH prices). I sold @ 0.80 in AH, and like anyone else, I had that nagging thought: "But what if this thing spikes to $1.00+ tomorrow?" At the same time, I looked at the volume, looked at the other
times on $NOVN price chart where similar moves happened on similar volume, and made a judgment call to take my profits and get out. So what am I saying? More often than not, it's a good idea--ESPECIALLY for new traders--to learn to strike while the iron is hot. Yes, you could...
Hold thru the big spike to 0.80+ because you believe it will hit $1.00, and you see your favorite Twitter trader (with a MUCH larger account) saying that they're "not selling a single share", but if you're building up your account, it's best to learn how 2 take profits by selling
into strength. In other words, don't be afraid to leave some $$$ on the table as you're building your account--LOCK THOSE PROFITS IN, because it's hard enough sitting waiting for a decent move than to feel like a bagholder b/c you didn't sell when there was a prime opportunity!
And yes, I know $NOVN had/has all the potential in the world to eventually hit $1.00, but what's wrong with taking advantage of a 100 PERCENT MOVE along the way? I have learned thru many years of painful experience that we often overestimate what a stock can do, and then when...
the party is over and we DIDN'T SELL, our account looks no different. We went for a little thrill ride, but now it's back to sitting in the red. Not the way I wanna roll. So for newer traders, take those profits when you can! Hard spikes like $NOVN can often have an equal and...
opposite reaction, so you can re-enter when they almost inevitably come crashing back down to earth. Strike while the iron is hot, and don't let any big-time trader (again, w/ much bigger account & more wiggle room) shame you out of taking profits!!! All the best to all of you.
