Brutal market - healthcare stocks have a major issue, especially those who deal with Medicare reimbursements.
Genoptix (GXDX) had been an
excellent place for us to hide out in - you can see the stock held up beautifully this entire selloff; but with the Obama effect it's been bludgeoned the past few sessions along with any stock who has a decent reliance on government payouts. So our thesis now is taking some bullets based on government. Now let me be clear it does NOT matter how much the Obama initiatives effect Genoptix - in the near term perception is everything. If people fear a drawdown on reimbursements, that is enough to hurt the stock for a long while - even if the reality is less punitive. Perception is reality in the stock market and for now the safe haven called healthcare is being blown up (I have many names on my watch lists showing similar action in this sector) This market is hard enough to find good long ideas without overhead issues such as this.
I am closing the last
0.6% stake under $28 and taking a 12% loss on this last batch (not a lot of dollars involved) We made money on some earlier trades trading this between $33 and $35 in small batches...
The chart has now turned from bullish to bearish and frankly it is now an excellent low risk short opportunity on rebound to $32. Thanks Obama. :) You can see the "double bottom" at $26.
[
Nov 7, 2008: Genoptix - Market Likes What it Hears]
[
Sep 3, 2008: Starting Genoptix Position]
No position
2 comments:
Damn, Looks like you pulled the trigger too early.
It shot up ~15% today on huge volume.
http://stockcharts.com/h-sc/ui?s=gxdx
Still looking at shorting it or going long?
SM,
Yes it did, but we sold it just under $28 so its about where we sold it
Frankly the fall yesterday would of caused me to sell lower since it looked like it was heading for free fall (went to $24)
Also of course I cannot predict the future - if I did I would be killing it in the markets every day. It was a smallish position in which I took action to preserve capital. Sometimes that will be wrong - but it was a conservative route. I replaced it with a similar healthcare stock that was in complete free fall for many days - so we'll see if this works out as a relative value among the 2 names.
Until details come out about what Obama wants to do with medicare all these stocks are probably under major pressure. It's a shame because GXDX was among the most stable soldier I had out there.
I'd probably still think to short it near $32 and if I'm wrong there I can take a small loss. Here around $28 you can potentially try to ride it up to resistance ($32) but there are easier trades out there. I don't like charts like this - no advantage - it could go either way (50/50) from here
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