In tech, I have been slowly cutting back Sandisk (SNDK) the past week, but took a sharper knife to the name today, reducing exposure another 40% due to technical reasons. Post Fed the stock jumped back over the 50 day moving average ($53) but closed below it yesterday and continues trading weak today. So I am doing some selling in this name, and will revisit it later.
This brings the fund's exposure to Sandisk down from 1.7% to 1.0%.
Next is Perini (PCR) which I've been cutting heavily the past 2 days. This is an infrastructure play similar to Foster Wheeler (FWLT), McDermott (MDR), or Jacobs Engineering (JEC) but the stock has not bounced like those name - and it did not even make a strong attempt on trying to break above its 50 day moving average ($56 - $57 range the past week). In a word, the action has been very troubling in this name so I think something is going on behind the scenes as the valuation is quite favorable.
I am bringing the exposure in this name down from 1.8% to the fund down to 0.5%. With the troubling price action I'd normally cut this name out completely from my holdings but the stock is trading at 17x earnings for 2007, much cheaper than anything else in the space so I am curious to see where this is going. The stock bottomed out near $45 in mid August, and from best I can tell from this chart it is heading back there for reasons we don't seem to know yet.
The other name that still continues weak is the exchange CME Group (CME), but I already cut that position back down to 0.6% of the fund earlier. With the good news in its sister stock ICE today, the stock usually would at least run in tandem to some degree but it's still comatose.
So here are some examples of stocks that I am letting the technical picture guide me on what to do. A 'value' investor would probably be more interested in buying at these levels since the stocks are cheaper than where they were before, but this can lead to long periods of the stock either dropping slowly but surely and/or flat performance. I'd rather be buying more of them once they show they are ready to move, even if its at higher prices. Most troubling to me, is the lack of participation upward in the flurry of speculation that is back in the market.
Long all names mentioned in fund; no personal positions
