$CPAH Spikes From Nowhere

Identify The Trade


$CPAH showed some activity premarket, but nothing to warrant much attention on my part. It wasn't until it started running up 20-40 cents every minute that I took interest. The background on this company was favorable for taking a short sell, but I needed to see how the volume played out and figure out the risk.

Choose The Strategy


My strategy was to use the high of day to get an entry and risk 10 to 20 cents above that point looking for a fade. CPAH didn't have any identifiable resistance until the $5.00 range, so plan b was to see if it could hit that resistance and take at trade off of that point.

Setup, Entry and Exit




Execute The Trade


For my execution, I took an early short after the $4.20 price was hit and retested and I used a 25 cent risk parameter. The ceiling got hit and I was forced out of the trade. When I saw the price move close towards $5.00, I got more confident and put on a larger size short against that resistance and let it work its way out. After a long drawn-out day the trade closed successfully, hitting my target in the $3.80's.