05/31 – VKTX trap and SESN squeeze

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My morning watch list: VKTX SESN TRXC TTOO TXMD

Today was one of those days that can be summed up as a trap and squeeze day. Fortunately I am good at cutting losses. Mostly, because I am impatient and have been hurt before by massive squeezes (CUR, DRYS, SPEX to name a few). Especially CUR taught me the lesson I needed (month worth of hard earned cash burned in 5 minutes due to size and pure stupidity!). Where I went wrong, in those trades ,was that I added size, because of either panic or hope and hoped the trade was going not against me. I have never lost big on a single entry. I learned early on that cutting losses on a small trade is easier then cutting losses with size. When you see those numbers add up, your little sphincter starts to cramp and you start to hyper focus on the screen, without actually seeing that is going on. Without size, you do not panic. What is $100, $200 or even $500? Compared to actual size, these paper cuts do not cause panic.

VKTX

VKTX was my main watch. I thought that 7.40 resistance and 52 week high would provide some form of actual resistance and maybe even a pullback (to setup for a breakout). 7,40 resistance, however, was completely disregarded and 7,50 (my initial cover point) was disregarded too. I started to build my position early when 6.70 failed. When this caught up, I was expecting some squeeze. I covered this position close to break-even and started to build my next position at 7.00, with the idea that 7.50 would be some form of resistance, to cover this size. I eventually covered at 8.. Down roughly a dollar per share. This ticker moved way to quickly and I wanted to add some shorts at 8.50. I didn’t, because there wasn’t much testing of support so I jumped the boat.

VKTX squeeze - 20183105

SESN had a similar plan to VKTX. Short at 2.15 resistance, with a 2.30 guide. I was shook by the VKTX loss, so I treated SESN with some extra care. No big loss this time and covered with a 2.25 average. I like that SESN is up again. I am expecting some bag holders at 2.50 to be honest. Also, it this ticker is up 50 cents per share verses the offering price of 1.80. Support today is at 1.90ish. So this might bounce again at 2ish tomorrow. What I am trying to show you here, is that there is a lot of opportunity with this ticker still.

SESN ramp - 20183105

Important to note here that, in hindsight, I should have either not enter the trade when VWAP was tested or cover when VWAP was reclaimed as on SESN.

How did you trade VKTX? Were you also part of the short squeeze? What do you think will happen with SESN? Will it crash tomorrow or are you expecting it to break resistance at 2.50? Let us know what you think in the comments. Also, please feel free to like and share this post with your fellow traders! Thank you for reading!


I started my trading career with Tim Sykes and when my breakout strategy did not work for me anymore and when I was lost, I joined Investors Underground. The DVD’s that helped me the most were Tim Grittani’s Trading Tickers and Nate Michaud’s Tandem Trader.  Software that has helped many trader can be found here: Trade Ideas software.

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