Synergy Pharmaceuticals Inc
Good afternoon Traders!
This was a tricky week with choppy markets driven by news out of Greece. We had a bit of a recovery on Tuesday but Wed and Thur were choppy again. Pre-market we had a few gappers this morning but I noticed the biggest gappers were stocks surging up pre-market on news of either a merger or a buyout. I typically avoid trading buyouts because they trade on higher volume but rarely have very much range. On a buyout or a merger the price has usually been determined and that reduces the potential for price action. The exception to this rule is when there is speculation that the government may not approve the merger or buyout due to monopoly laws, or when there is speculation that there may be a bidding way for the company.
Lack of Momentum Means Tough Trading
Unfortunately today the stocks surging up were primarily on low volume and with catalysts that didn’t interest me. I did like the look of SGYP this morning for a long over 9.52. I called this out in the morning as a potential gap and go trade. I apply my Momentum Trading Strategies to these stocks that indicate they will open higher pre-market. I bought SGYP right under 9.50 and sold half for a small profit and the other half for a small loss. The stock is extremely choppy does a lot of whipsaws. It ended up running a bit after I sold but I think I did the right thing by bailing out and taking the small loss.
SGYP Synergy Pharmaceuticals Inc
Over the last few weeks SGYP has been extremely active proving that despite the 80mil share float it can put in big moves. Unfortunately the stock has also been extremely difficult for day trading because it’s a crowded name. This means lots of traders are jumping in and out and this makes it more difficult to have clean moves.
The best chance for successful trading will be after the holiday weekend starting next Monday with the pre-market session and then the opening bell at 9:30.