Friday, January 16, 2009

Bookkeeping: Cutting Allegiant Travel (ALGT) on Spike

Allegiant Travel (ALGT) is befuddling me. We cut it back from a 1.5% stake to 0.7% Tuesday as it broke the support we were looking at ($38) [Jan 13: Bookkeeping - Cutting Allegiant Travel] I wrote

The 200 day moving average is down at $31 so I'll look at picking up some there, if we hit that level. Or if it gets back over $41 and holds it - right now the stock is in no man's land technically.

Yesterday morning it proceeded to drop to near $33 which made me feel smug. I had a limit order waiting at $31s... but no cigar. It reversed to $37 in the rally yesterday and in a snap of a finger is now back at $40, or just below where we began. Aye carumba.

For now, we're at the very top of no man's land - so I'm going to cut back to a 0.1% stake and then go on the same advice I said above - if we "break out" above resistance; I'll jump back in (maybe $41.50 based on the chart); or if it breaks back down to low $30s we'll add there. All I know is it makes me feel like I'm a twisted pretzel.

(note - this chart shows $33.75 as the 200 day, but my normal charting shows $31; obviously in this case I should of used this chart!)

As an aside for the market, I'm neutral on the near term (onus on bulls to hold S&P 850 by 4 PM today) - after being "bullish" as we hit S&P 820. The "easy money" if you will, was that 'turn' from S&P 820+, but as I wrote last week - with the failure to break out early last week and that reversal below S&P 920 we're now looking to sell into & short on any meaningful rally. Which is a change from our behavior the previous 7-8 weeks which was more of "dip buying" attitude. My hope is we get some better prices (nearer to S&P 880-900) to do so and some of the "worst of" junk begins to rally to higher levels. If not, we'll get back to the dark side on a break below S&P 820.

If you remember, almost every "bailout" has been greeted with initial cheer (by "free market" participants) and then led to a sell off when reality struck. Seriously what is happening is pathetic - Bank of America pays $40B for Merrill Lynch (firms were paid for "advising this deal which was struck in under 48 hours; bonuses were paid out), then takes our TARP money and buys stakes in a Chinese bank - and then comes not 2 months later to the taxpayer to bail them out? It really is a disaster, disgusting, and shameful. And this won't be the last of it.

But other than that, I love the deal (ahem)

Long Allegiant Travel in fund; no personal position

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012