As I await the breakout in the 3:30 PM half-hour which should lead to cries of joy on CNBC I am going to re-expand our position in Perfect World (PWRD). After a lot of success with this name 3-6 months ago, the only thing that has been perfect about the position, is the ability to shake us out on each of these breaks below the 50 day moving average. After hovering below that point last week, the "buy anything that moves" mantra has returned to this name and we'll give it 1 more shot.
Since stopping out at the 50 day moving average has proven to be a poor methodology with this stock I am going to instead use a backup plan; stop out if a new lower low is created. The stock has obviously formed a bottom in the mid $42s over the past two weeks so we'll give it more leeway, and stop out below that level with the majority of that position. But for now we have added about a 1.5% allocation as we await blast off on the indexes....
Completely off topic, but another name to add to the list of breakouts is Ctrip.com (CTRP) - Chinese mania is back, it feels like fall 2007. Traditional momentum players prefer buying a screaming chart like this, whereas I am more conservative and tend to favor stocks just beginning a (potential) breakout like PWRD. Neither is wrong or right, and I'll sometimes do both - just more subject to larger haircuts when the stock is not near any support levels and reverses, as with the pure "momo" stocks. Speaking of momo, gold $1200... go central bankers go.
p.s. (we'll be getting long on the S&P on any break over S&P 1114, I won't devote a post to it... )
Cmon 3:30 PM... or S&P 1114, whichever comes first.
Long both names mentioned in fund; no personal position
