Tuesday, May 4, 2010

Bookkeeping: Some Sales

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Obviously our long exposure is not huge coming into the week at just over a quarter of the portfolio but I still want to make some adjustments, especially when charts have degraded. I obviously dropped 2 names yesterday first thing in the morning as their charts had turned for the worse late last week.

First, Atheros Communications (ATHR) despite a stellar earnings report and far better valuation than 80% of the things rising almost every day without pause has broken below the 50 day moving average intraday. Barring an "invisible hand" hockey stick recovery in the markets, it could end the day in quite bad position and being our top holding I don't want to take chances - I've cut 75% of the stake.


I am going to lock in some more profits in Lennar (LEN), 1/3rd of the position to lock in some profits - the chart is still fine, I just want to keep some of the unrealized gains on the books.


Cut Riverbed Technology (RVBD) exposure in half... it has come in nicely to a support area but I don't like that gap right below. If the market remains weak it should fill sooner rather than later.



Selling half of Skyworks Solutions (SWKS) for almost identical reasons as Riverbed above... after gapping up Friday on good earnings, the stock looks more apt to "fill" now that in the "can't lose" market of the previous 2.5 months. Actually it looks even more likely to fill since it is way above any support.



Placing a bunch of stop losses on other positions which are still holding support.

I am not touching any index plays right now - long or short - because my hand has turned stone cold the past few weeks trying to make even short term guestimates on what the market will do. Plus the moves in pre-market have really messed with some trends. But this could be a 'heads and shoulders' situation for those who play the technical game. There is still an ultimate gap to fill at 1078 if and when... I would normally say it's time to press shorts once the 50 day moving average is broken but I said that on the 20 day moving average and twice in the last week the premarket action crushed that trade. So for now, will focus on hunkering down.

EDIT 11:30 AM - Long exposure has now been culled to 20% of the portfolio. A few other major positions now have stop losses in place so that number can drop from here quite easily. I will not be duped by the premarket games that surely will be played tomorrow morning or later this week. The prevailing trend DURING THE DAY the past 6-7 sessions has been down. The premarket action has been creating dislocations - both in the charts and in the game plans of shorts since you are forced to stop out if you have a conservative game plan.

So for now I expect to underperform any big market days to the upside caused by SPY futures being bid up, but I'll also underperform any big down days. Back to cash is king mode. The S&P 500 now sits in a band between its 50 day and 20 day, and obviously it at the very low end of that range. I'd expect the computer to hold the fort here - let's see what sort of bounce off S&P 1173 we get.



Long all names mentioned in fund; no personal position

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