Friday, June 25, 2010

Bookkeeping: Cutting Some Sandisk (SNDK) Exposure

I cut about 15% of the Sandisk (SNDK) position yesterday as the market weakened, even as the stock held its 20 day moving average.  Today I am going to cut about 25% more which roughly halves my stake.  Both sales at decent losses, 6 to 9%.  The stock has a gap it is working to fill and is part of the 'teflon' crew at this moment.  But as a hostage to 'student body left' trading it's working on its 6th straight down day.   I'd like to see these 'teflon' stocks take more of a beating before feeling the market can bounce in a more substantial way; they were so overbought that even these selloffs have only taken most down to their 20 day.

The chart is still fine, making higher highs and pulling back in a normal manner - hasn't breached the 50 day other than a few of the gut wrenching drops in the greater market in early May. 

I am thinking of placing an order to rebuy nearer to the 50 day moving average of $43.15 and then if the stock breaks down below the 50 day that will probably coincide with a S&P 500 breaking down below 1040 and we'll need to cut back again.  But for now just taking down the exposure and then watching.

As an aside I covered the moderate (less than 2%) short TNA (3x small cap) I mentioned I put on yesterday afternoon  when everyone else was going long as the market went into S&P 1070 this AM.  I have replaced that with a bit larger SPY put position which I will hold unless the S&P 500 jumps over highs of the day.  EDIT 11:48 AM - sold those puts, I want to see a break below lows of the days to press anything short since it's such a quiet session and without emotion the market rarely goes down. I prefer to own these on trend days when the market goes in 1 direction all day; instead today is a chop day; just going back and forth in a small range of 6 S&P points.

Long Sandisk in fund; no personal position

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