Small cap stocks (where low volumes of the stock are available) are susceptible to unusual short term price movements, resulting from media hype or investor exuberance. By screening for tell tale chart patterns, he identifies these price movements that have no fundamental basis, and takes a position into or against them. Short term contrarian model looking for unsubstantiated movement in low cap... [more +]

Small cap stocks (where low volumes of the stock are available) are susceptible to unusual short term price movements, resulting from media hype or investor exuberance. By screening for tell tale chart patterns, he identifies these price movements that have no fundamental basis, and takes a position into or against them. Short term contrarian model looking for unsubstantiated movement in low cap stocks. [less -]

Looks for situations with unusual momentum, often a result of promotion, manipulation or unnatural exuberance uncorrelated to any fundamental cause. These situations are found in low cap stocks with a market capitalisation of $50m to $500m.

Maintains active monitoring of numerous blogs, bulletin boards, email activity and news to identify opportunities and monitors trading volume. May consider 10 to 20 opportunities per day but target stock must have both liquidity volume to participate and shorting availability.

Purchases the stock if he catches the opportunity early in the cycle and shorts the stock at the end of the cycle. Rarely exposes a significant portion of his capital to a single position and rarely more than 1 or 2 different stocks per day, and will remain in cash while waiting for appropriate opportunities.

Targets 10-20% return in individual situations. However usually closes on time basis or momentum indicators not P&L target. Rarely holds a position for more than a few days and uses stop loss orders as a tool to limit losses.