This is purely a technical move; I find valuations in this whole former teflon tech stock area compelling but until the market deems these to be buys, I want to use lifts to reduce exposure. Research in Motion (RIMM) has been trading in between $90-$95 for the better part of this rally. Not really much ... I guess if they opened a subprime arm the market would of rewarded them with a 30% move the past week and a half. After all the Fed saves all financials. I continue to use Google (GOOG), and Apple (AAPL) as my bellweathers... they have no lift at all.
Research in Motion is above its 200 day moving average ($82ish), but below the 50 day ($102). I've charted the 20 day moving average above... so you can see what RIMM is doing... butting up against it constantly and not breaking through. So I am cutting back. My future moves with this name are to either buy it back on weakness or buy on a breakout over the 50 day moving average (north of $102). Right now it is in no man's land, as are many of the stocks I hold - listless. So I want to protect from a larger fall.... if the market pulls back these very weak technology names (despite being great values fundamentally) will trend down. See Google (GOOG) for a great example. So I am going to take a smallish loss here to protect against larger ones.
Apple (AAPL) is in even weaker position (below 200 day moving average and range bound $126-$137), so I took a smaller sale there as well to reduce exposure a bit - all the same reasoning as for RIMM. Right now fundamentals mean little, so I am going to let the charts tell me when to get back into these names. What appears cheap today, can be far cheaper a weak from now.
I am still approaching this market with a bearish tone as the above moves display. If I am wrong (which is a 50% probability) I will be happy to buy these stocks at higher prices when the technical condition improves. I will miss the beginning of their moves up, but when the market comes back to embracing these names, the moves upward should allow for a long ride. I continue to play defense even if it costs me in the near term in performance.
So I'm making a sizeable sale in RIMM @ low $94s (100 of 250 shares), and a smaller sale in AAPL @ $132s. I think fair value for both are higher but that does not mean we cannot see RIMM in the $80s and AAPL in the $110s.
Long all names mentioned in fund; no personal position
