Day Trading AEZS – We did it again!
As shown on our previous post, we took again another chance to make a profit on the volatility of Aeterna Zentaris stock based on some factors that we will discuss on this post.
What made us jump in on this trade?
At the end of the market day of July 20th there was a quick drop on the share price due to traders flooding the market with sell orders and just before the day finished there was some traders buying the dip
You got to understand that the stock market have a huge influence on traders psychology, so if a trader see a huge run up by a ticker (in this case AESZ) they will also want to take part on the trade, either by being bulls or bears.
As you can see as soon as the market opened on the 21st, there was a TON of buy order rising the share price (look at the HUGE green volume stick at the bottom of the graph)
This is where psychology plays another role on the trade, if you own the stock and suddenly you see a 15% increase on the share price, what would you do???…… YES! Sell the stock! Therefore, now the market becomes flooded with sell orders and the share price drops again.
Good old supply and demand!
As you can see on the graph, we saw the same situation when the market closed on the 21st, a rapid decline on the share price due to the increase of sell orders and traders buying the dip, so we decided to use past history as a reference for the future.
I know, past history should never be used as a reference from what might happen on the future, but also, history repeats itself!
We sent a buy order at 3:59:35pm 25 seconds before the market closed and managed to grab 200 shares (we wanted 250) at $3.49. We checked pre market at 9:09am and saw that there was buying orders for $4.09, so we sent a limit sell order for $4.00 which is around 15% gain, at 9:23am we check the market again and saw that the buy orders drop to $4.05 per share
We decided to change our limit order to $3.98 per share and wait for the market to open……. And as soon the market opened our order filled at $3.99 per share! or a 14% gain!
We decided to sell as soon as the market because we expected the share price to drop considerably on the morning which is what happened afterwards
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