Friday, July 2, 2010

Bookkeeping: Closing Sandisk (SNDK)

Doing some mid summer cleaning, I'm taking my marbles and going home - although the bully named Mother Market took quite a few marbles from me (stole some lunch money as well) - and closing out Sandisk (SNDK) after a very short holding period.  I more or less top ticked this name by buying the "breakout" June 16th - classic.  As this market struggles for another day, SNDK  looks like it will close below the 50 day moving average for the 4th day in a row.  I thought there might be some life to it after it came down to "fill the gap" last Friday but this week has just been too difficult in the general market for this type of holding to keep afloat.  SNDK is a commodity high beta name (risk on, risk off) that was a purchase based on chart alone (a series of higher highs - now kaput)  and until the market shows life, this won't be the type of name to hold its own very well.

From the original purchase around $50, I sold half at a 10% loss in the $45s once the stock broke down below the 20 day (to reduce risk), and the other half is going to go out the door today for a 17% loss.  Today's allocation was about 0.9%.

Since this purchase I have been able to buy some other names with the same 'high beta' characteristics but (thus far) more stable.  Of course in a wider selloff, they will take their medicine just the same.  After all, it's the 1:1 correlation market where almost every asset class is the same as the S&P 500.

No position


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