$DDE Merges And Boosts

Identify The Trade


$DDE had a very clean gap that was due to some news that it was merging with another company. So because the gap was over +50% I was interested in this stock. The stock has typical features, low institutional ownership, low insider ownership and a 14 million share float. Things I like to see.

Choose The Strategy


From the premarket chart, my strategy was to catch the breakdown below the $2.95 support line. Shorting the breakdown is not my favorite play because it doesn't usually work out for me. However I decided to give it another go.

Setup, Entry and Exit




Execute The Trade


At the market open the stock opened very weak and it only took a few minutes before it went to the support level. At this point it looked weak, so I took my entry with a risk around $3.10 about 15 cents from my entry. $DDE reversed hard and blew through my risk level, which I decided to move to high-of-day at $3.25, I should have just exited because 30 minutes later I found myself moving my risk level again. However today was my lucky day and holding+praying worked. I recognized the backside of the move started forming and i got a 2nd entry. Shortly afterward, $DDE went back to the $3.00 region and I took my leave of this poorly executed trade in the $3.10's.