actually, the PEIX short hit the final target (T2) while i was on vacation last week. however, prices have stuck to that level like white on rice, offering plenty of chances to take profits if you have not done so already. i still believe that the odds favor bankruptcy for this one over time (zero price target) but would never consider holding a short position with such a low price holding out for a bankruptcy announcement. not only do penny stocks tie up a tremendous amount of buying power (margin), but the risk of being caught in a sudden short squeeze or news driven pop is just not worth the extra 35 cents. here’s a few of the charts on this trade and as i’m finally winding up my break from trading, i will continue to update the existing trades and work on looking for some new trading opps. i’d imaging that there are several more active trades that hit targets or were stopped out over the last couple of weeks so i will work on updating those during the remainder of the week.
one last thing, remember that when reporting the gains on short trades, i use the formula which takes the total gain (short entry/sell price minus the covering/buy price divided by the sell price). e.g. the PEIX short trade triggered on a break of 1.00. therefore, the move down to T2 (.35) was a .65 gain. 0.65/1.00 = 65%, whereas the more common formula, which is used to calculate gains on long-side trades (the difference of the sell price minus the buy price/the buy price). that formula would have produced a gain of 186% on the trade since technically you bought at .35 (buy to cover) and sold at 1.00 (sold short). however, when you short a stock, you are putting out (in this case), 1.00 of capital to make a 0.65 profit, i.e.- 65%.
