Friday, March 12, 2010

Bookkeeping: Restarting Riverbed Technology (RVBD)

Riverbed Technology (RVBD) is a name I've been chasing the better part of the last month, after highlighting it as interesting once more mid February.  After peaking over $29 Monday, it's come in about 7% this week, and is now at an area I am willing to jump in... 

Today's action also fills a gap that was created 2 weeks ago during one of our "Magical Mondays".  It is always tough buying after a large surge, when the stock first begins to pullback because you don't know if if this is step 1 of a larger move down (to say the 50 day moving average) or just a short rest stop.  Which is why a lot of people don't bother to buy anything but a stock that is going straight up.  For example, F5 Networks (FFIV), another of our holdings.

I am going to begin a moderate 1% stake in RVBD today around $27.10 and actually hope to see more downside so I can build the position at lower prices.  $25s area would be great.  Or if it reverses back up and makes a new high, I can add more over $29.25, but we have something to start.  Since I took profits in FFIV recently, I will consider this a replacement for that 'networking' exposure, in terms of broad portfolio exposure.

Let me reiterate, this is not like buying a 'breakout' - so the stock could easily fall from here... which in this case I'd be more than ok with to gather more shares, as long as it doesn't break the 50 day moving average.

Long both names mentioned in fund; no personal position

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