Tuesday, August 19, 2008

Bookkeeping: Cutting Mastercard (MA) as it hits 20 Day Moving Average

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Well we caught another HUGE run, this time with Mastercard (MA) - made well over $6 on this one from front to finish. (being facetious) At this rate we might beat a 6 month CD. I was hoping Mastercard could break out past the 20 day moving average (mid $240s) and make an attempt to the 50 day ($260s and falling), but hope is for those guys who use fundamentals. Usually we wait for a stock to attempt to hit the 50 day moving average before watching for a rejection but I'm not even going to wait that long and assume the "move" is over as it's getting batted back even at the 20 day. Could be wrong. Could be right. But cash we will go into... selling this down from 2.5% of portfolio to 0.5%. I keep finding very few opportunities to make money on the long side - thankfully Fuel Systems Solutions (FSYS) never lets up.

I have a pretty big buy list right now but in this market, the best way to make anymore than 1.5% on a position (ex airlines of course) if to wait for the hammering and just guess where the catching knife falls and then hope you are close. The odds are poor with that methodology, because being a few days early means you can be down 15%+, but true sustained breakouts are rare at this time. For example - remember that nice post earnings breakout of Ctrip.com (CTRP) - almost gone.

Remember that nice post earnings breakout of Intuitive Surgical (ISRG) - almost gone.


Etc. Countless charts like these. No one is "investing"; everyone is "trading". Yes a few names are actually sustaining breakouts but guessing in advance which few will do that, versus the 90%+ that are giving back all their gains within a few weeks is best left to Nostradamus. Why is FSYS sustaining its run? I have no idea - the chart (at the time) looked no different than ISRG or CTRP. Just random action - 1 out of 20 stocks will be allowed to sustain a big move; the other 19 you have to sell when you get the pop. Because the market will take all your gains away if you don't. So we'll obey until odds turn more into our favor.

Long all named mentioned in fund except Intuitive Surgical; long Fuel Systems Solutions in personal account

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