$IPXL, Impax Laboratories Inc.

Trade Date: 3/1/17

            On the morning of March 1, 2017 $IPXL, Impax Laboratories gapped down a whopping 27.20% from the previous day’s price. The company reported an earnings loss of $279.6 million and an EPS loss of $0.16 per share. An increase in competition, lower revenue, and the CEO Fred Wilkinson abruptly resigning? Yikes! Opening below the $12.00 support level means it’s time to short.

Technical Criteria

  • Price Change: $ -3.25 and -27.20%
  • Premarket Volume: 78,460 shares
  • Daily Average Volume: 1.23 million shares
  • Average True Range: $0.59

Trade Style: Day Trade

Position Bias: Bearish

Entry Price & Time

            After the stock opened I looked for some kind of setup to dictate my trade. When the base materialized, I hoped the stock stayed near this level and formed a bear flag. At this point I calculated my stop, entry and risk before entering. Once it broke the lows, I entered with a stop above the highs.

            Entry Price: $10.60

            Entry Time: 9:34 AM

            Stop Price: $11.85

            Risk: $1.25

$IPXL Entry on 1 min. chart

Trade Management and Psychology

            At first I hesitated entering this trade because of the aggravating 5 cent tick rule the SEC implemented on over 1000 small companies. But, sometimes the setup is too attractive. Once I entered I was immediately profitable allowing me to become relaxed and comfortable. All I need to do is wait until the end of the day, but then..

            10:15 AM: The stock pulled back more than I was comfortable with but it never reached my price. After a while it began to fade once again. Commence lounging.

            2:50 PM: Jackpot! Although this doesn’t always happen, later in the day additional traders can push it further in the direction of the trend. This is why I try to hold as long as possible until the end of the day.

Exit Price & Time

            My rule is to exit my position completely at the end of the day. Why? Because my position was a winner and I try to hold winners as long as possible. If I was a losing, I would close it sooner. There’s no reason why a winner shouldn’t turn into a bigger winner, which is what happened today.

            Exit Price: $12.75

            Exit Time: 11:51 AM

$IPXL Exit on 5 min. chart

$IPXL Trade Executions

Results and Evaluation

            I was very pleased with this trade because I followed my plan. One thing that has helps me hold winning positions is gratitude, (which I will write an article on one day). If I’m green in a position, I try to be grateful for the win no matter how small it may be. Once I’ve even said, “Yes! Thank you for this $5!” Gratitude eradicates fear of losing small wins and greed for a bigger ones.

Risk: $1.25

Reward: $1.10           

R Multiple: +0.88 R