Do you remember that supernova idea I gave you in July?
I highlighted a stock that had a history of going bonkers and could potentially catch fire soon.
You may not recall it or didn’t see it in the first place. That’s OK, because we’ve recently had another stock go supernova…and I’m going to show you how to catch the next one.
These stocks can produce enormous returns in very little time.
But buyer beware! These stocks shoot higher…then generally fall at the same speed.
If you’re a conservative investor or even a low-risk level punter…you may want to avoid these kinds of moves.
If you’re still reading, I’ll presume you’re game for a punt every now and again.
Let’s move onto the juicy stuff…
Defining the Supernova Stocks that Spike
How do you know if you’re dealing with a supernova company?
Well that answer is simple. Look left…
Nope, I’m not talking in a cryptic language. I literally mean look left of the chart.
Scroll back through the history of the stock and look at it.
If the stock you’re looking at is either flat or gradually rising, I’m sorry, it’s not a supernova stock.
If, on the other hand, the stock makes rapid burst higher in price…then we could be dealing with a supernova stock.
Keep it on your supernova watchlist. It could blow at any time.
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Alright, well here’s the example I have for you today.
The company is called Stavely Minerals Ltd [ASX:SVY].
Warning: Do not go chasing the stock now, use this as learning material!
Let me show you the chart pattern and then I’ll tell you a little bit about Stavely.
What you’re looking at is a true supernova stock. See those wild bursts higher in price? Those moves averaged around 150% each time.
That’s pretty wild.
And the time it took the company to bolt higher?
That averaged around 45 days.
Alright, now that we’ve looked left, let’s find out what the company does…
Stavely Minerals is a mineral exploration company…hence the name.
The company has assets located in two regions of Australia. The first being none other than Western Victoria.
And the second is situated in the scorching sun in North Queensland.
The company is on the search for copper and gold.
The Stavely Minerals share price went bonkers
Anyway, enough of that. You get the idea of what they do.
Now, I want you draw your attention to the supernova move that occurred recently…
Take a look at the big blue arrow in the top right of the image.
Yep, that move occurred over a two-day period.
We’re talking 420% between 20 September and 27 September.
If the supernova move is signaling more great things to come, then SVY should remain high from here.
But gushes like this don’t tend to stay high forever.
So, what caused the move?
Stavely had an ‘outstanding’ shallow high-grade copper-gold discovery.
This is the kind of result you want to see when fishing for supernovas.
This is the perfect catalyst and you can already see the result of this move!
So, let’s wrap this up.
As I said, always look left to see the history of the company’s share price.
Slow and steady wins the race kind of shares are not going to be a supernova…
At least not speaking with probability.
The secret hidden in plain sight
Also, shares that are simply trading sideways and show no signs of life. These are not the kinds of shares to be placing on your supernova watchlist.
Only look for shares that have a history of spiking and spiking hard.
Then, begin to analyse their spikes. You’ll learn that sometimes it’s best to buy the day of the spike, or maybe you should buy the next day’s opening.
Each share has its own ‘vibration’, its own movement. It’s our job to analyse it and find out how it moves.
And its for that exact reason why one trading strategy doesn’t work on every single company.
Until next time,