How To Spot a Stock Torpedo – T3 Live
T3 Live

How To Spot a Stock Torpedo


Last week we did a write-up on the bullish set-up in BNTX.

Subsequent to the article, on Thursday BNTX exploded 5 points, flirting with a 2 month triple top breakout in the 59 region.

Going into Thursday’s session Hit & Run members still held 2 separate long swing positions in BNTX:

The original with an average cost basis of 49.18.

The second with an average cost basis of 52.91.

On Thursday’s rally, subscribers sold half the original position, locking in a gain of 7.04.

On Thursday’s close, BNTX looked set for continuation on Friday

Then it gapped down 3 points and it seemed like our protective trailing stops may be hit.

However, a funny thing happened on the way to profits shrinking.

The following 10 min BNTX shows it struck an Opening Spike Low and immediately rebounded.

Two things suggested BNTX was actually being accumulated again on Friday:

1) Despite escalating market weakness during the session, BNTX firmed.

2) Follow through is key, despite its outsized-gap, BNTX failed to follow through to the downside.

Both factors were conspicuously constructive.

As the last hour came around and BNTX refused to come in, anxious buyers bid the stock, resulting in an explosive intraday triple top breakout or what I call a Rule of 4 Breakout above the 59.50 region.

The Late Day Breakout was all the more impressive given the crimson tide on the tape on Friday.

When a stock is a green bean in a sea of red, it’s talking.

In shrugging off the broad market’s downdraft, BNTX is a good example of a Torpedo setup, shouting, “Damn the Torpedoes, Full Steam Ahead.”

Late Day Breakouts when the market is getting hit are a good place to look for these Torpedoes to explode. Stocks seldom reverse on the runoff — especially on Fridays.

Torpedo Alley on Friday often scores direct hits.

BNTX rallied nearly 7% in the last hour on Friday and subscribers sold half their second position, locking in an 8.09 gain.

Going into Monday morning, we are up 12.95 on the second piece of the original position and 9.22 on the back half of the second position.

In keeping with our Hit & Run/Trim & Trail method, we sell half when the stock rallies strongly and trail a protective stop on the balance of the position.

When you sell half and the stock goes higher, you are glad you kept half.

When you sell half and the stock goes lower, you are glad you sold half.

It’s a win/win proposition.

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