DNDN- Disecting a decent trade

Unlike my last trade on QCOR, I actually had a story to back this up. DNDN was up on 10/6 on this news: http://biz.yahoo.com/ap/081007/dendreon_mover.html?.v=1. DNDN is some biotech company who had some numbers that were positive, but not good enough to pass FDA standards. In my eyes this looked like the stock was getting pumped up (up over 30% on the day)... therefore leading to a dump...





I checked the message boards as these are the people who truly believe in these types of plays. I feel bad for them, but in this niche someone has to lose in a zero sum game. The boards seemed divided, some were thinking this was the start of this stock going to astronomical highs, others pointed out DNDN has done the same thing in the past and then tanked... I believed the stock would tank the next day.





Reserved shares in the morning of 10/7. At first my broker (TOS- Think or Swim, http://www.thinkorswim.com/) didn't have any for me to borrow but magically found the amount I wanted. This stock came up in my TIMalerts (http://www.timalerts.com/) subscription and suggested being on the weary side as it had a high amount of volume the previous day so the pattern couldnt be as predictable. I used 2/3 of the shares I originally reserved. Here is the trade:

Here is the takeaway:

1. The stock tanked quickly in the beginning of the day (first circle). Anywhere in that area would have been ideal, but I had no clue if there was going to be a short squeeze or what it would do in the first 15-30 minutes. When it started to move sideways, I got in at $6.10. I could have got in at $6.15 but this was the first time trading with hard to borrow shares and didn't realize I had to actually place an order through trade desk via the chat sysyem. It was at $6.15 but it was going up and down so I told my broker to execute at $6.10.

2. The stock had trouble cracking the $6.00 and $5.90 level for most of the day. I sat patiently and waited believing this stock was no good. Looking back it seems like a risky play to make that bet since it lost a lot in the opening minutes. Also, had some small squeezes during the trade (second and third circle).

3. Waited patiently till the late afternoon where it started to gain speed fading and sold at $5.56 which was a pretty good exit point. Thought I could ride it down to $5.50 but took profits.