Tuesday, October 12, 2010

Bookkeeping: Closing Salesforce.com (CRM), Acme Packet (APKT), and F5 Networks (FFIV)

I am not liking the action of the 'cloud' or any such stocks remotely related to such.  There has been a wholesale move out of this space since the turn of the quarter as speculators chase into commodities or lower quality stocks.  I already cut a lot of exposure in this group but am going to fully exit a few names because the technicals are degrading rapidly.

I had a 0.1% exposure remaining in Salesforce.com (CRM) - selling that this morning.

I had a 0.3% exposure remaining in Acme Packet (APKT) - selling that this morning.

I had a 1.2% exposure remaining in F5 Networks (FFIV) - selling that this morning.

The latter two are stocks that broke support but I was willing to give a benefit of a doubt if they could quickly regain support.  Thus far they have failed; only rallying to a key pivot point and being turned back.  In theory they are now potential short opportunities.  CRM has already broken down clearly.

In the weekly summary a week and a half ago I noted this group came out of the box in October (Friday the 1st) weak, and it was a canary in the coal mine to potentially monitor if it was not a 1 day event.  Then last Wednesday, the Equinix warning did damage to the entire group.  Now we are seeing lack of interest by the dip buyers in entering as for the classic momentum trader they would rather buy high and sell higher, rather than buy any dips.  Obviously "value investors" are nowhere to be seen in this group, so all you have left without the momentum traders are the "Hewett Packard is rumored to buy ABC cloud company" traders.

Could I be wrong, and these turn on a dime and rocket back up?  Certainly - but it would not be in the realm of high probability.

No positions

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