Monday, June 14, 2010

Bookkeeping: Some Limit Short Orders Hit

A few of my limit short orders have hit this morning which coincides with the move to S&P 1100 - as was the original plan.  With the market seemingly gapping up or down almost every day now on random news I feel more comfortable with holding individual stocks overnight as hedges than any sort of heavy index exposure.  I will keep these with a short leash (i.e. tight stops) so any losses are minor.  Again, these are all technical set ups and have little to do with fundamentals.  The first two to hit are Hartford Financial (HIG) and Netease (NTES).

HIG was shorted at a 1.5% allocation @ $24.93.  I will give it 4% leeway i.e. $26.00 which is above the high water mark of 2 weeks ago.  This is a "risk on" type of trade as higher risk insurers have become fast money favorites.  The original intent when the order was entered last week was to short right at the 200 day moving average, assuming it would be difficult to jump over, but so much for that (in 'student body left' market world you can see so many stocks 'gap up' together as computers rush in guns blazing).  I'm down 35 cents thus far.

NTES (Chinese video games) was shorted at a 1.75% allocation @ $31.49.   Likewise, I'll give it a 4.5% leeway i.e. $33.00 which would take it over its 50 day moving average of $32.80 and falling.  The stock has had all types of problems of late, not even able to get back over its 20 day.  It has cleared that hurdle this morning (on a 'gap up' of course), but we'll see how long it lasts.

Again bigger picture, I want to build a decent size portfolio of shorts here in the 1100-1108 range in case this is yet another rejection on the S&P 500.  If it is not, and we're off to the faces, I'll take modest losses on these and then turn the switch and focus on the long side over the 50 day moving average of 1121.   Since there is a 50/50 chance of going either way (up or down) and due to all the focus on premarket movement, I'd rather build a portfolio of diversified names at this time (so no individual equity can hurt me) rather than do index positions for overnight positions.  I have about 5 other limit orders waiting and we'll see if any of those hit today.

Short both names mentioned in fund; no personal position


Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012