What's better than shorting a stock that bounces after a morning panic? Shorting a bounce after a morning panic as it's forming a head and shoulders pattern.

This Biotech Company (EXEL) recently gapped from the 3.90's because its product (Cometriq) had positive phase III results. It had a morning panic today because it issued a nasty stock financing below 6 dollars.

I found this stock because I was using my scanner to find morning panics. I wanted to practice shorting stocks that bounce after having a morning panic. I noticed that 6.15 was a key area of resistance, and I didn’t want to trade before 10AM so I have an idea of what it could do.

Once the panic ended and it bottomed around 5.89, I saw that the stock was beginning to uptrend. Fundamentally, it had no reason to uptrend (let alone go green) because of that toxic financing.

Seeing it was bouncing now, I had a plan to short as close to 6.15 as it could get.

Besides the uptrend, I saw it form a head of a potential Head and Shoulder pattern, which would have my risk of getting squeezed.

This resistance at 6.15 was so strong and the closest got to was 6.13. I placed a short order at 6.12 with a plan to cover if it breaks 6.15. If it cracks 6.00 I’ll cover depending on price action and level 2.

I was completely confused when this message prevented me from making my short.

“How am I insufficient?” “I have exactly $2007 dollars!”

After a quick search at Google, I realized I wasn't able to short because the commission to short is 9.95, which would put my account under 2k dollars. You need 2k to use margin/short sell.

As I’m writing this, the stock is at 5.78.

It stinks I wasn't able to trade, but I'm happy because the stock did exactly what I wanted further boosting my confidence, so I’m ready for the next EXEL in the future.

Once I save up and add more funds in my account.