The Supernova Strategy

The Supernova Strategy

Supernova Strategy Cheat Sheet

By Timothy Sykes

This is one of my all-time favorite chart patterns! Here's a cheat sheet with some of the vital information you need to know about the supernova pattern.

Supernova Strategy Cheat Sheet

For Stock Trading

What is the Supernova Pattern?

In space, a supernova is a star that suddenly and dramatically explodes, only to fizzle out shortly after. With stocks, this shows up as an explosion in stock price that creates opportunities to buy on the way up and short sell on the way down before it fades into oblivion over the next several weeks and months. Here are some examples of recent supernova charts:

Kali Inc. (CVEM: KALY): Supernova

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NaturalShrimp Inc (OTCQB: SHMP): Supernova

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Electrameccanica Vehicles Corp. Ltd. (NASDAQ: SOLO): Supernova 2-for-1

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Puration Inc (OTCPK: PURA): Supernova

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What Causes a Supernova?

?? Supernovas can be triggered by number of catalysts, including newsletter mentions, world events, message board hype, and company news.

?? It doesn't really matter what the catalyst is for a supernova. What you're looking for is the possibility that the supernova will occur, and then you can trade based on the pattern.

Note: Supernovas can last longer and are much greater in magnitude than anybody thinks possible -- so be careful!

How The Supernova Pattern Plays Out

?? These stocks experience massive volatility and liquidity, which means it's easy to both buy and short sell shares. This makes it easy to enter and exit positions, which is one of the reasons why this is one of my favorite patterns!

?? With the supernova, the amount they will go up can vary. Sometimes stocks double or triple, but they could even go up ten times or more.

?? Supernovas explode, and they create great opportunities for traders.

Dip Buying / Shorting Supernovas: What to Look For

?? Look for morning panics, particularly after big multi-day spikes. ?? Stop losses create a wave of selling, creating opportunities for dip buying. ?? Look for "maximum pain" levels, then dip buy at those levels.

Tips for Dip Buying/Shorting Supernovas

?? Focus on volatile stocks that go supernova, or explode in price. ?? Look to short sell them on their first red day. ?? Look to dip buy them into panic if/when the stock holds past support. ?? Shorting isn't as common in the market now for supernovas; I'm only

shorting 5?10% of the time. ?? It's good to understand this pattern so that you can take advantage of it by

buying or short selling depending on the ever-adapting market.

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