Thursday, July 15, 2010

Bookkeeping: Another Round of Profits on Acme Packet (APKT) and VMWare (VMW)

As mentioned yesterday you never know when these stocks that are on tears will pull back and can leave good money on the table, but there are bigger problems to be faced with.  I am not huge on secondary technical indicators (I try to K.I.S.S.) but Acme Packet (APKT) is now above the top Bollinger Band and its RSI is near the top end of its range, where it usually tops out (70ish).  Hence I will take a third off of what remains here in the low to mid $32s.

I already cut my VMWare (VMW) pretty sharply, hence since my position size is small I am going to sell 90%+ of what is remaining and hope to buy back lower.  Same technical theme as Acme Packet.

In a generally sloping upward market one wants to rebuy these type of names at their 10 day, or if possible 20 day moving averages.  That was a market we saw for much of 2009 and Feb-April 2010.  Right now we are in more of a bipolar market where we are seeing huge moves in 2-4 week increments in completely different directions so its much trickier knowing when to pile back in.  What looks like a smart purchase on a pullback to the 20 day moving average can look poor if the market is in a violent selloff a week later.

Long Acme Packet, VMWare in fund; no personal position


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