I was in the middle of a webinar when a company issued a press release.
The stock spiked from $7 to $10 in 3 minutes.
I decided to watch because it looked like it was hanging in the $9s.
And the news looked good on the surface.
But after reading the press release, I told my students the news was both good and bad.
I warned them not to chase because it might come down just as fast as it spiked.
Why?
Because I’ve been around long enough to know the difference between news and hype.
And I’ve learned to read the news with a trader’s mindset (mostly through trial and error).
Sure enough, 20 minutes later, the stock was right back where it started.
You might be wondering: “Why is it dropping?”
To become a better trader, you need to understand catalysts.
This is why Axil Brands (AXIL) spiked…
Source: Globe Newswire
It appears to be good news, right? But even with distribution deals, that’s not always the case…
Why “Good News” Isn’t Always Good for the Company
The problem with Walmart deals is that they usually crush the small company.
Small companies don’t really have a choice.
They have to get involved because they want Walmart distribution.
But if you actually run the numbers, it’s often very bad for the small company.
There was even a study saying “that gross margin is significantly less for Walmart suppliers than non-suppliers.”
The study went on to say that “Walmart is able to extract more concessions from smaller firms than from larger firms.”
So, the PR looked good (and it pulled in a LOT of inexperienced traders).
But then reality hit…
Source: StocksToTrade
AXIL 4-29-26, how to read news like a trader.
The first thing a lot of people ask is…
Why all the selling right around $10? Was it short sellers?
Take a look at this daily candle chart from January 2025 to April…
Source: StocksToTrade
AXIL January 25 to present, daily candle, bagholders’ delight.
Notice how every time AXIL spiked big, it topped out in the $10s.
That’s exactly where it topped during my webinar (it doesn’t show on the chart because premarket prices don’t show on the daily candle).
What that tells me is that there is a TON of selling pressure in the $10s.
In this case, it could be bagholders (traders who bought near the top of those spikes and then got crushed).
Or it might be short sellers, or even insiders (I don’t know and don’t care).
The point is, it has a history of failing in exactly the same place (and it only took a few seconds to pull up a long-term chart).
So, AXIL had two big red flags:
1. Walmart’s history of predatory deals with small companies.
2. A history of topping in the $10s before getting crushed.
That explains AXIL, but what about reading the news like a trader in general?
There’s one thing you should NEVER do, regardless of how good the news seems…
Never Try To Adapt the Market to Your Ego
Recognize that YOU have to adapt to what the market is doing.
The market doesn’t care about you. And the news isn’t “good” until the market says so.
It’s about adapting to what the market is doing.
If you trade good risk-to-reward setups…
And if you understand how catalysts can affect stock prices (and react instead of predict)…
Trading will be FAR less frustrating.
Tomorrow, I’ll share 7 key catalysts you should be watching.
If you have any questions, email me at SykesDaily@BanyanHill.com.
Cheers,
Tim Sykes
Editor, Tim Sykes Daily
