Tuesday, January 13, 2009

Bookkeeping: Short Volcano (VOLC)

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One of the 4 short limit orders I mentioned this morning just hit; Volcano (VOLC)

Volcano Corporation designs, develops, manufactures, and commercializes a range of intravascular ultrasound (IVUS) and functional measurement (FM) products for the diagnosis and treatment of vascular and structural heart disease worldwide.

It's a nicely growing small cap medical instrument company which will be earning $0.02 for 2008 and $0.18 for 2009. Expensive - but not shorting on valuation. Shorting on juicy chart that provides excellent cover.

200 day moving average around $14.70; 50 day moving average in low $15s and falling fast... when/if the 50 day moves BELOW the 200 day that is a very nasty thing in "technical" land ... but more importantly we have 2 layers of resistance ahead of us so "double insurance". Also a double top at $18... all ugly things. If you put a 30 PE ratio on 2009 estimates it would be a $5.40 stock...

Shorting about a 1.2% allocation in the $14.60s area
Stop loss out at $15.30
Target: Open (hoping for sub $13 - maybe $12.50) - $13 would give us a 11% gain.

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