Tuesday, February 10, 2009

Bookkeeping: Closing Geron (GERN) and Amazon.com (AMZN) Shorts

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I have to give these two stocks credit; they have held up well - even in today's mess of a tape. It appears it's going to take some serious market weakness to see more of a downfall. These are "technical scalps" (short term in and out trades) and one worked out ok - Geron (GERN) and the other did not - Amazon.com (AMZN). Net of the two I lost more in Amazon than I won in Geron but it's no major damage. (the NASDAQ has been a favorite of the hedge funds the past 6-7 sessions)

[Feb 4: Short Amazon.com] Amazon started in $62.60s
[Jan 30: Short Geron] Geron started in $7.80s

Out of Amazon.com in mid $63s and Geron $7.50s.

I am closing both positions out today; one day the gaps in both charts will fill but it might have to wait until the next panic move in the markets.


I mentioned both Harley Davidson (HOG) and Signet Jewelers (SIG) this morning as shorts I was eyeing (both have since faltered badly along with the market) but I did not add them do to "portfolio management". Since I had so much short exposure already I did not want to have anymore (since my long exposure is quite lacking) going into a "who knows how the market will react to Geithner" moment. If the market took off to the races I'd of been forced to sell a lot of shorts for losses even if there was no fundamental reason for the rise. I feel much more comfortable sleeping at night shorting stocks/sectors I don't like rather than these technical scalps on strong charts. (but when those names at the top of the post finally break down they will be huge wins in a short amount of time so I'll keep an eye on them for signs of a real breakdown)


Let me take one moment to point out SIG in particular - you have the exact same "gap" in the chart (same reason I short AMZN and GERN) but the overall chart is far worse. So even with today's fall this one seems very appealing to fall to lower $6 range.

Now we have "openings available" to add some fundamentally troubled companies if/when the next hope rally comes. The problem of late is we are getting such strong moves (5% up Thu/Fri, now 4% down) you are really guessing on market direction more than individual stock direction. And guessing the market from day to day is a fool's paradise. So the charts become less useless during these emotional or "news driven" moments. Until we get out of this trading range I don't want to be overly biased either long or short - hence I'm staying balanced until we breakdown or breakup. The only one getting rich off this are the brokers.

And just like that we're 10 S&P points away from our old friend S&P 820. The magnet.

We're still flat on the day and making up a lot of lost ground (vs the market) that we gave up last Thu/Fri.

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