Everyone’s preoccupied with the big names in the market right now: Apple, NVIDIA, Amazon.
Blue-chip stocks like these, they’re well-known. Predictable. Boring. And with earnings season, everyone has their eyes on them.
Yes, the AI boom has lifted these giants. But there’s a dirty secret that Wall Street doesn’t want you to know about…
The real profit potential for individuals, people like you and me, doesn’t come from the stocks that Wall Street praises. But the ones they pretend don’t exist.
I’m looking for the stocks that Wall Street hates.
You know the type:
• Small market caps.
• Ugly balance sheets.
• Questionable management.
On paper, these setups are the lowest of the low.
But under the right conditions, they explode 100%, 300%, even 1,000% intraday!
These are moves that NVDA can’t even dream of.
For example, I’ll show you how I played a small-cap software company that spiked 1,100%. And it followed my patterns perfectly.
Most traders will never know how to spot these moves.
They’re usually too late. Or worse. They’re stuck bag-holding blue chips, waiting on measly gains.
Got a small account and a big work ethic?
These setups are made for you!
Good Companies vs. Bad Companies
Let’s get something straight, part of my trade process goes against a key rule that Wall Street stresses…
They buy stock in good companies.
I buy stock in bad companies.
But understand, our goals are completely different.
Wall Street is looking for long-term gains. They target companies that are most likely to grow in value over the next few months, years, and decades.
Small-account traders don’t have time to wait for long-term gains.
So instead, I focus on larger percent gains in a shorter time frame.
And without fail, the largest stock spikes come from the worst companies.
For example, there were two promising runners I watched from two different tech-related stocks:
➤ Stagwell Inc. (STGW)
This stock had a market cap of over $1 billion. And it had just announced a new partnership with Palantir Technologies Inc. (PLTR).
➤ MMtec Inc. (MTC)
This stock had a market cap of only $80 million. And before its spike, the price hit new 52-week lows.
Which stock do you think spiked higher?
STGW is a more credible stock. It’s more valuable based on the market cap. And it announced news with a globally famous AI-related company, Palantir.
MTC is a fraction of the size of STGW. And it didn’t announce any news before the move.
STGW spiked 80% during premarket. Then the price faded for the rest of the day.
STGW chart intraday, 1-minute candles.
MTC spiked 1,100% in less than two days. And it kept going higher.
MTC chart intraday, 1-minute candles.
How Is This Possible?
Most traders don’t understand why the worst companies often make the biggest moves.
There are two simple reasons.
First, the size of the stock’s float.
These “crappy” stocks usually have fewer shares available to trade. When demand surges, even slightly, the limited supply can send prices vertical.
It’s basic economics: Low supply, high demand, big price spike.
• STGW had a float of 244 million shares.
• MTC had a float of only 25 million shares.
Second, there’s an overwhelming amount of short sellers in the market right now.
Crappy stocks attract a ton of short sellers because they look awful on paper: Bad financials, shady history, next to no news.
Shorts figure they can ride the bearish momentum for fat gains.
But when too many short sellers find the same stock, any bullish momentum can cause a few to scramble and buy-to-cover, closing their positions.
That fleeting bullish momentum can cause more shorts to panic.
And soon enough, we’ve got a full-blown short squeeze on our hands.
Look at MTC, a stock with almost no real business, terrible fundamentals, and a sketchy long-term chart.
It spiked 1,100% in two days because it had a low float and the chart kept falling lower, luring in more short sellers day after day.
The low float met the high demand. Shorts got trapped. Boom. Supernova.
Now compare that to STGW, an actual business with a real AI partnership and positive news. It spiked 80% during premarket on a solid catalyst … But it slid lower intraday.
Why? Higher float. Less explosive potential.
It’s not about the quality of the stock. It’s about the quality of the setup.
Small-account traders should stop chasing “good” stocks, and start following small-cap runners that have only just started to spike.
The Next Small-Cap Supernova
The next MTC is right around the corner.
And the only question is, will you be ready?
When a low-float stock with high-squeeze probability starts to heat up, I don’t hesitate.
Forget the slow grind of “valuable” stocks. That’s Wall Street’s game. Not ours.
Instead, we look for:
• Fast setups.
• Big momentum.
• Repeating patterns.
You just need the right timing.
If you have any questions, email me at [email protected].
Cheers,
Tim SykesEditor, Tim Sykes Daily
