Jim Van Meerten
3 min read
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I ignored my own advice and bought Ostin Technology (OST), leading to a 94% loss when the stock crashed.
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My stop-loss order failed due to low volume and cascading stops, highlighting the risks in thinly traded stocks.
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I neglected fundamental analysis — declining revenue, negative income, and poor cash flow should have warned me off the trade.
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Always confirm technical signals with strong fundamentals. This costly mistake reinforces the importance of disciplined investing.
On June 12, I published an article on Ostin Technology titled: “This Undiscovered Stock Is Up 150% in 2025.”
Although I said it was not a “Buy” recommendation, I waited a couple of days and bought it anyway because I just couldn’t resist its technical signals. Here is what happened:
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June 12: Wrote about OST and emphasized it was not a “Buy” recommendation.
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June 18: I bought it anyway at $7.335, buying more shares than I care to admit.
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June 18: Placed a Sell Stop at $6.10.
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June 26: At approximately 1:30 p.m. Eastern the stock tanked before settling down to close at $0.55, a loss of about 94%.
As I mentioned above, I did have a Stop Loss in, but because of the low volume and all the other Stop Loses triggering, my Stop Loss was executed at $1.08. Way below my $6.10 Stop Loss.
Learn from my mistake, but first look at this UGLY chart:
OST Price vs. Daily Moving Averages:
Note the big hit in volume on April 15 that started the climb and the big hit in volume on June 26 that ended it.
Because I am writing to a large audience, I try to make sure that the stocks I screen are at least in the Russell 3000 Index (IWV) and only traded on major exchanges, instead of trading over the counter or on the “pink sheets.” I figured if a company has met a major exchange’s listing requirements, it would be hard for a “pump and dump” or other such crash to happen in its stock. I was wrong.
Ironically, I sent a Webinar proposal to John Rowland CMT, Barchart’s Senior Market Strategist, the morning of the crash. If I had followed my own advice in that proposal, I would never have bought OST stock. Hopefully John will get approval to present that Webinar to you soon.
