Monday, June 14, 2010

Bookkeeping: More Shorts Added and Ryanair Holdings (RYAAY) Stopped Out

A week ago on Tuesday all the world was going to hell in a hand basket, US employment stunk, copper was at 6 month lows, and the S&P was falling to yearly lows.  Not 4 sessions later all is great in the world because the stock market bounced.  Boo yah bipolar world...

The Ryanair (RYAAY) short I put on late last week has stopped out with a 2% loss; this one was a simple "are you going to go over the 200 day or not?" and the answer is yes - just barely though.  Not my favorite type of chart to short but it was such a simple set up and all other stocks I was interested in were still too far from resistance to begin the trade so I took a flier. (pun intended!)  I don't think the coast is clear yet for the name but I am staying disciplined and adhering to my original trade.

Three other shorts limit orders I had out have hit mid day, so I am up to a basket of 5.  In terms of executing correct prices to short at that would coincide with the S&P 500 at 1100ish I am very happy.  I said for my limits to hit most stocks that I really wanted to short would need to rally 4-6% from where they were Thursday and here we are.  Now we just have to see if the student body moves right or left.

#1 - Energizer Holdings (ENR): simple story here, the 20 day is lower than the 50 day is lower than the 200 day; a poor chart.  It has been rebuffed on any move to the 20 day for 6 weeks; my trade was simply to place a limit short at the 20 day and then we'll see if the trend continues.  If not, I'm out with a low risky entry.

1.75% exposure @ $55.50.  My stop will be $57.50ish which is the 50 day and would signal a new higher high; that would garner a 3.5% loss.

#2 - Pitney Bowes (PBI) - this is "slow money" but just a simple hedge as part of a portfolio in case the market retraces back down.  Just like Energizer not exactly a name HAL9000 and crew will jump in and out of based on the day's headlines.   Very simple set up - the 50 and 200 day moving averages are converging in 1 spot, so I placed my limit order there.  The stock rallied to that spot today.

1.7% exposure @ $22.92.  My stop will be a clearance of the 50 day moving average allowing for a little market maker shake and bake so let's say $23.35 or just under 2%.  Again not a 'fast money' trade either to the upside or downside.

#3 - Green Mountain Coffee Roasters (GMCR) - yeh! Love to short old momo plays.  This was the hottest stock in the market for 4-5 months in 2009.  Until it finally guided to a level the momentum players were disappointed in, and then they left en masse.   Similar to Pitney Bowes I places my order hoping for a rally into resistance which is here at the 200 day.  Now it will either "student body left" dance over and above resistance or fall back.

1.6% exposure @ $24.76.  My stop will be $26.00 or a break over the 50 day moving average AND 200 day, which should be a low risk probability.  Unless we gap up in the stock market .75% tomorrow of course.  This is a volatile name hence the 5% berth for stop loss.

Short GMCR, PBI, ENR in fund; no personal position


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