So, as expected, HAUP has traded like many infamous penny stocks of yesteryear. After leaping from 0.92 (Thursday afternoon) to 4.85 (intraday Friday), HAUP has lost all momentum from a cleverly timed press release (Apple tie-in). Friday's mediocre earnings report after the bell set shares on an accelerated decline.
HAUP gapped down this morning to 3.22 and closed at 2.82. Whatever the surrounding conditions, the shares have done two things:
1. Retraced 38% of the Thursday-Friday gain (3.38)
2. Retraced 50% of the same gain (2.92)
If and when HAUP slides to 2.45, that would make a 61.8% retrace — possibly the max of this tumultuous slide. At 2.45, or even 2.00, HAUP would still have doubled (and then some) from its Thursday intraday low.
I've been neither long nor short this stock, but I've been on the winning and losing end of long trades in penny stocks years ago, and it was ecstatic or gruesome. No in-between. I finally learned the danger of fooling with pennies that had no real basis for a 300 or 400 or 500% gain in a matter of hours.
Like any other stock, risk management is paramount. Risking anything more than 2% of an entire account value on one trade is not sensible.
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