- 941 stocks/ETFs grew more than 5 folds since 2008.
- 121 more than 20 folds.
- Of the 121
- 22 have P/E < 0, which means they are not making money.
- 31 have P/E > 35, which means they are expensive.
- If you have these stocks, congratulations on your gains. But isn’t it time to take profit?
First, let’s take a look at the distribution of the 941 stocks that have grown more than 5 folds.
|Gain = the highest gain since 2008||PE>35||0 <= PE <35||PE<0||subtotal|
|Gain ≥ 20||31||68||22||121|
|15 ≤ Gain < 20||16||50||18||84|
|10 ≤ Gain < 15||40||102||41||183|
|5 ≤ Gain <10||119||340||94||553|
Of the 941 stocks/ETFs, 206 have PE >35, and 175 PE <0. We should be careful with all of these. Especially for those already grew more than 20 folds. Consider the odds of growing 50% or dropping 20%. Once you have a clear picture, just follow your common sense.
Let’s take a closer look at the 22 stocks that have grown more than 20 folds but with EPS less than 0. Several of the stocks were penny stocks at 2008. So, not surprisingly, they could rise up to more than 20 folds. Some even went a lot higher but are still more than 20 folds today.
Don’t go ahead and short these stocks.
In how to short and how to avoid short-squeeze, we recommended staying away from penny stocks unless you are an experienced day trader.
Please referred to
“What to short now and how DIY?”
“How to handle short-squeeze, DIY?”
Using Earning Channel, we can select similar stocks for shorting. Please remember that the prerequisites for shorting a stock are:
- There is room to gain in shorting. Has grown a lot, and not yet a penny stock.
- Really overpriced. Check fundamentals, the earnings, and the growth of earnings.
- The long-term up channel has been broken. The price is below break-down
- The daily chart has formed a down-channel with at least two peaks and two dips.
- The daily down channel has become a weekly down channel.
Okay, let’s look at the top 10 expensive ones of these stocks. All of them look like gambling stocks to us. Several of these 22 stocks are medical or pharmaceutical companies. Unless you are an insider or are familiar with the fundamentals of the company and its industry, there is only one recommendation: sell, take profit and stay away.
Look at some of the monthly charts.
Wow! EGHT, from 0.4 to 16.8, 40 folds.
Near the upper wall of the long-term monthly up-channel: Time to take profit.
TRS, from 0.77 to 33.53, 43 times. Now at 21.4, still 27.8 times. Could I hold?
The long-term monthly up-channel had been broken at Q4 2013.
It is now a monthly down-channel. Looks like a candidate to short.
Please remember triple check the fundamentals of any stock you want to short.
Look at the weekly and daily channel for action taking.
IRIX, from 0.36 to 16.64, 46 times. Looks like a top is forming. Please refer to
“Topping Patterns and Channel Trading” for handling tops.
To know how to handle all kinds of situations, simply download Earning Channel and play with it. Some of our previous articles and exercises may be helpful. But the most important thing is to download and play with it yourself.
Hope this discussion is useful to you.
Good luck on your investment.
The Earning Channel software, as well as the articles, tutorials and suggestions in the website and social media, are provided as tools and references to help users develop their own market analyses and make their own investment decisions. Users are ultimately responsible for the way in which they use this information to invest in the stock market. Nothing associated with the Earning Channel or the information presented in articles and tutorials should be interpreted as direct advice on buying or selling of securities.