OSUR is a good example of two things: first and most importantly is to always diversify your holdings and never put too much into any one position. OSUR was at a very profitable gain and almost to the first target when the stock was halted pending the release of the FDA’s decision on it’s OTC AIDS test kit. the product was granted approval and the stock was up over 30% the day that it resumed trading (although a good part of that gain was just recouping the recent losses on the stock/gain on the short trade). had i had an unusually large short position in the stock, i would have suffered a big loss in my trading account and likely hit the panic button and covered the short that morning near the highs. instead, as the loss was very manageable and mitigated by gains on some other holdings that morning, it allowed me to objectively analyze the stock from both a fundamental (based on the news) and technical perspective, which i shared that morning, thereby keeping me in the trade (with protective stop measures in place).
the other example is in the “buy the rumor, sell the news” analysis that i posted about the morning of the big gap up. i am fully aware that this trade might still be stopped out and my analysis might prove to be incorrect if this stock is just digesting those big one-day gains before ripping ahead to new highs. however, i have adjusted my stops to a level that will assure nothing more than a slight loss at this point and will continue to lower my stops as/if the trade plays out as expected.
here’s the updated daily chart showing what now appears to be a megaphone topping pattern (broadening top), which if broken to the downside, would be bearish from a technical perspective and likely confirm my previous analysis on the stock (sell the news). again, this trade is now back to break-even so make sure to set your stops accordingly if still in the trade or if you decide to short the stock here in anticipation of the megaphone pattern breaking down (which would be another objective entry if that happens).