Double your money in two weeks! Sounds like a scam, but it’s actually just Overstock.com (OSTK) who’s shares closed at 11.46 on April 17. On the following day OSTK reported their quarterly earnings which beat estimates by a wide margin, shooting the stock up 37% on high volume.
The volume continued to pour in until OSTK reached $24.26 as well as a resistance level on May 3 where some traders chose to take their profits. If you were holding stock on April 17 through May 3 you earned a whopping 111% gain in just two weeks.
What if you missed the first day’s 37% gain? If you bought at the close on April 18 at 15.70 you would still have earned a 55% gain from that point. Why would you buy a stock that has just ripped 37% in one day? Price and volume – buyers had the cause to want that stock, and some weren’t prepared to buy the first day as shown by the even higher volume on the second day. Those indicators made it a worthwhile candidate to try an entry even after a 37% gain had already occurred.