The first week of the Overnight Swing Fund is in the books and it was an interesting one for sure. First off I was not anticipating running the fund, but after one of our partners dropped out just prior to launch the responsibility fell upon me to get the fund going.
If you have been following me on StockTwits (@2khedgefund) then you know that I am giving real time entry/exit calls on the fund as well as giving all overnight calls on our website's chat.
Enough of the background, let's get to our review!
I was very conservative on the positions that I took this week with three picked each night and not dumping the entire account into the positions, with the exception of my April 7th purchases (not shown, as they are unrealized).
Let's take a look at the buys and sells this week:
As you can see it is a good thing that I was using Robinhood because I took small, conservative positions in stocks that I believed were going to run. While I only called 50% in the positive (four positive, three negative, one even) I did a good job at keeping my losses very minimal. I will tell you right now that there are very few people that can actually pull off an 80% successful call rate. Due to this it is paramount to minimize losses so that your winners can shine.
The best position I took this week was actually my first in TXMD. I am planning on doing chart analysis on my largest win each week, but to be honest the only reason I made more than the 2-3% I was expecting was that on the evening of April 3rd the company announced positive data from a Phase 3 trial. Sometimes you get lucky, what else can I say?
Since TXMD can't be totally chalked up to technical analysis then we can take a look at the second best gainer, CONN (6.91%).
So looking at the chart above (5 day/5 min intervals) you can see that on April 4th CONN made a big jump, to the tune of almost 30%, because of a beat on their 4th quarter earnings report. When this kind of news drops on a stock that is over 20% short I will always be watching it into close. As you can see on the chart, there was a couple of huge buys going into close and that is when I entered at 10.85. I entered during that 5 min block of buys as I started to see the ask begin to disappear at an alarming rate.
The next morning, on the first spike I exited the position at 11.60 (first down arrow on 4/5). If I had been a bit more patient I could have possibly ridden the position out and added another 20-30 cents to my profits.
As you can see I use very simplistic charts when doing my research for overnight selections. Typically I focus mainly on the EOD volume, the resistance on the daily chart (not shown), and what percentage of the float is short. Sometimes it works, sometimes it does not, but I always try to just minimize my loss and play it as safe as possible. Remember that a 2-3% gain on an overnight position is solid. Go for the base hit not the home run!
Overall it was a pretty successful week.
WEEK OF APRIL 3rd SUMMARY:
FUND TOTAL: 2118.55 (STARTED WK AT 2000)
FUND GAIN (LOSS): 118.55
PERCENT GAIN (LOSS): 5.928%
This summary includes the unrealized gains from RUN, AKS, and PACB that the fund currently holds into Monday April 10th.