Monday, March 2, 2009

Bookkeeping: Closing Illumina (ILMN) Short and Beginning to Rebuild Long

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I'm closing out the Illumina (ILMN) short started in mid February [Feb 19: Bookkeeping - Short Illumina] as 90% of our objective has been fulfilled here

Original thesis

I want to be long(er) Illumina (ILMN) eventually but short first. Starting to see it roll over, so I'm doing a 3.3% stake right below $33 with my target that gap. That would be $29. North of $35 I'll reconsider (I don't want to use the term stop out because some readers have misinterpreted per some emails I've received) If this executes fully this will be a 12% gain.

Chart at the time


Chart now



The gap is around $29 but at $29.80s I'll take the rest of this short trade off since as I said in the previous entry, I won't have time to input 12 trades when this market reverses. I did leave quite a bit on the table on this trade as the position size is smaller than it should be on this last batch of sales.

I've started to rebuild the position on the long side but slowly... 0.1% stake up to 0.7%. Unless the stock gets north of $35, it's not a bullish chart however. Range bound for now so I am in no hurry to build up a long position - yet another case of a false breakout on the long side once it peaked its head over the 200 day moving average and starting running. Just a killer pattern - a market where you cannot buy breakouts.

For now Illumina is sort of in no man's land from a technical perspective & we'll let the action in the coming weeks tell us how to position next; I like the fundamental story but fundamentals mean nothing in this stock market.

Long Illumina in fund; no personal position

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