Category Archives: $500 Challenge

Update on the $500 Experiment

Man, I have done a craptastic job of updating this blog. Who knew it would be so freakin’ difficult to do at times? I had to spend most of my weekend banging out an 8-page research paper for my accounting class (pursuing a Bachelors in Finance), so I didn’t really get a chance to update this blog with the latest & the greatest on the $500 experiment. Now that it’s 1:07 a.m. on 3/4/14, I wanted to get a quick post in before the market opens later today.

I spotted Vermillion, Inc. (NASDAQ: VRML) on 2/27/14 (after market hours) by way of the OptionsXpress chart pattern screener (cool feature). They had it featured as a bottom triangle, which it is, but if you look closely at the 1-year chart, you’ll also see a textbook head-and-shoulders bottom pattern that has all the right price action going on. Check out the chart here:

Vermillion, Inc. (VRML) Stock Chart
Vermillion, Inc. (VRML) daily chart (1-year)

So I noticed that on 2/27/14 VRML closed at a new high of 3.24 after a fairly convincing breakout. The long period of consolidation by way of a 7-month head-and-shoulders bottom pattern as well as the beautiful price action (tight intraday trading ranges with quiet volume) gave me pretty much what I needed to go ahead and make the decision to get long on the next trading day. So, on the morning of Friday the 28th I bought 100 shares of VRML on the open and was filled at 3.2382. On the 28th, the stock hit a new 7-month high of 3.50 early in the trading session, but then calmed down a little into the afternoon and basically “humdrummed” its way through the rest of the session, staying at between 3.26 and 3.30 right up until 4:00 p.m., where as I was watching my “Time & Sales” widget in ThinkorSwim, an order for 5,000 shares gets plopped onto the board, sending the price up to 3.40, which ended up being the closing price. This purchase literally came in right at the closing bell. So it was interesting to me to see how the closing price was being “presented” a certain way, when the majority of the trading day the stock wasn’t really hanging out in 3.40 territory. I saw this as a positive thing.

The weekend comes and goes, and now we have the price action this morning. I figured that there would be a lull in the action today, and as it turns out I was right. VRML stayed in a fairly tight range all day long, but saw significant buying support at around 3.25. Interestingly enough, over 20% of today’s 81,475 shares were exchanged in the last roughly 30 minutes of the trading day. I managed to grab a screenshot of the Time & Sales widget right at today’s close; check it out here:

Vermillion, Inc. (VRML) Time & Sales
Snapshot of Times & Sales for VRML

Notice again the relatively large order coming at the very end of the day, where 2,000 shares were purchased at 3.35 per share, again right at the very end of the trading day (16:00:00). A heck of a lot of shares were bought & sold in that last hour, mostly in the 3.30-ish range. I can’t help but to think that this is a positive development, and it looks like there is anticipation of a move higher because this quiet accumulation of shares makes the case for a strong move coming very soon. I’m of the opinion that it will actually happen today (3/4/14) due to how quiet yesterday’s action was as a whole. Sometimes there needs to be that pause where the market can “catch its breath” before hitting another run up.

Interestingly enough, a news item for VRML dropped right at 4:00 p.m. as well. It stated that Vermilion has been invited to present at the 26th annual ROTH Capital Partners Conference, an investment banking pow-wow that highlights growth-oriented companies. This conference is an invitation-only shindig, so this news tidbit may be quite positive for VRML’s stock price when the market opens later today. I believe that Vermilion may see $4 per share here very shortly (maybe today?). I have my exit target set at 3.75. Here’s the news piece:

Vermillion, Inc. (VRML) news item
News snippet for Vermillion, Inc. (VRML) that came out on 3/3/14

So that’s where I’m at right now. My VGZ stock ain’t doing crap at the moment. I thought that the pop in gold today (or yesterday, I guess–I just need to go to bed) would help VGZ’s price, but no dice on that one. I actually wish I would have thought twice about getting into this stock since my intention for this $500 experiment was more for short-term trading than longer-term holds, but I think I may have bought it as a way to “console” myself for the foolishness of the FNMA trade. As shallow as that reason sounds, yes, folks…it just may be true. Overall, though, I do believe that the miners are going to have a raging year once gold decides to convincingly crack 1400 an ounce.

Okay, I’m half-delirious and ready for bed. Pray for this situation in Ukraine. We may be on the verge of some major drama here, folks.