Monday, January 4, 2010

Bookkeeping: Adding to Atheros Communications (ATHR) and Skyworks Solutions (SWKS)

We had cut half of our very profitable Atheros Communication (ATHR) position for identical reasons we sold the S&P index position earlier today - a stock that had run into resistance formed by an earlier high; in this case $34.50 - which was a summer 2008 closing price.

As is the textbook, the stock stalled at resistance - and pulled back a bit.  However, as we like to see with strong stocks - there was not really any selloff, just sideways action for just under 2 weeks.  And now the stock appears to be ready to move over summer 2008 highs as the "melt up" in the general market ensues.

With the stock in the $34.90s, we might have the beginning of the next leg up, so I am simply adding back the half of the exposure we sold on Dec 22nd.  Cost us a few percentage points but in a normal market, we tend to see selloffs and rallies in the general market, giving us many more opportunities to buy on dips.  This market is anything but normal.  If the move continues, I'll layer in more exposure.

A reader pointed out Skyworks Solutions (SWKS) - our largest individual position, appeared to be breaking out - I added another 0.8% exposure on top of what we already own in the $14.80s area.

As for the S&P 500, 1130 was swiss cheese; we blasted through it as if it is not there.  Once more, like much of 2009 - having any caution only cost you.  Buy buy buy.   I will be layering back into index positions via our normal product selection since resistance was smashed so easily.  Remember, we have a huge base built from November / December so the ensuing move should be very large in nature - I am calling for 7 to 10% which clearly could take us to S&P 1200 or above ...
Long Skyworks Solutions, Atheros Communication in fund; long Skyworks Solutions in personal account

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