Low-Float Catalyst Scanner

Workflow

1. Screen Candidates

Float: < 20M shares (ideal < 5M)
Market Cap: $25M to $500M
Price: $2 to $20
Average Volume: > 100K
Pre-Market Gap: >= 20%
Pre-Market Volume: >= 3x 30-day average

Data Sources: FinViz, Trade-Ideas, Benzinga Pro, MarketChameleon

2. Validate Catalyst

Tier 1 (Trade Aggressively):

• Binding LOI/partnership with named major entity
• FDA approval/clearance
• Major contract with dollar amounts
• Acquisition announcement

Tier 2 (Trade Cautiously):

• Non-binding LOI with credible partner
• Product launch in hot sector
• Analyst initiation with coverage

Tier 3 (Avoid):

• "In discussions" or "exploring"
• No SEC filing backup
• Pump without news
• Volume spike without catalyst

Validation:

• PR released pre-market (optimal) or after-hours prior
• Partner/contract verifiable
• Hot sector alignment (crypto, AI, biotech, gaming)
• Insider ownership >30% (locked shares = lower effective float)

3. Identify Entry Window

4. Execute Entry

Pre-Market Entry (Aggressive):

• Enter after 8:00 AM ET if volume confirms
• Target near VWAP ($13.20 in ROLR case)
• Higher risk, higher reward

Opening Breakout (Balanced):

• Wait for break above pre-market high
• Enter on first 5-min green candle above VWAP + 9-EMA
• Add on micro-pullbacks (<30% retracement)

Position Sizing:

• Maximum 2-3% of portfolio (25-50% normal size due to volatility)
• Max 1-2% account risk per trade

5. Execute Exit

Stop Loss: $0.20 below entry OR low of previous red candle

Exit Immediately:

• Massive red volume bar (distribution)
• Break below VWAP + 9-EMA
• Trading halt >30 minutes
• End of day 1 (gaps often fill next morning)

CRITICAL: Exit before close on day 1. ROLR dropped 28.93% on day 3.

Red Flags (Do Not Enter)

• Float >50M shares (won't move explosively)
• No clear news catalyst (manipulation risk)
• Stock already +300%+ over multiple days (exhausted)
• Heavy insider selling (Form 4 filings)
• Pending dilution (S-3 shelf, ATM offering announced)
• Pre-market volume declining after initial spike

Core Principles

1. SPEED is everything - These moves happen in hours, not days
2. EXIT on day 1 - Most low-float runners fade 30-50% next day
3. SIZE DOWN - Use 25-50% normal position due to extreme volatility
4. NEWS is required - Volume without catalyst = manipulation

Technical Indicators

Must Monitor:

• VWAP (stay above = bullish)
• 9-EMA (trend confirmation)
• Relative Volume (>10x = real move)
• RSI (>70 = overbought, prepare exit)

Patterns:

• Bull flags (shallow <30% pullback)
• Flat-top breakouts (resistance break)
• ABCD continuation (higher highs/lows)

Claude's Role When Using This Skill

Do:

• Screen for low-float stocks with pre-market gaps
• Validate catalyst quality and partner legitimacy
• Calculate float and effective float (minus insider holdings)
• Alert when volume/price action suggests exit
• Remind of same-day exit rule

Cannot:

• Guarantee any stock will run
• Time exact tops or bottoms
• Predict which halt will resume up vs down
• Override your execution discipline

References

Load as needed:

• rolr-case-study.md - Complete ROLR analysis, intraday metrics, post-surge behavior
• entry-exit-tactics.md - Detailed entry strategies, exit protocols, risk management
• screening-tools.md - Scanner configurations, sector focus, replication framework

Low-float momentum trading is extremely volatile. Position size appropriately. Never risk more than 1-2% of account per trade.