I closed my 2000 shares around 19.10- after reading port's comments, it became clear an extended holding period would entail far too much risk should NGas prices in fact dive to 2.
I'm liking how SKUL can't break below $11.8. The more times they try to break it down and fail the more likely it is that the huge short position covers.
Guys - this is the classic fakeout trade if it happens: http://www.benzinga.com/trading-ideas/short-ideas/12/01/2274334/is-skul-a-solid-short?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+benzinga/trading-ideas+%28Channels+-+Trading+Ideas%29
The issue with this trade is there is 60% of the entire float short the stock right now. Most likely all of them are thinking the same thing: the shares of insiders were locked up for 6 months and now they're just going to dump the stock. So short the stock to oblivion because they will sell it and further depress the price.
The problem in my mind is what happens if the insiders don't sell at these prices? They own a huge stake in the company and maybe they actually believe in the company. So let's say there is some selling and the stock then drops below $11.8 for a second. Well, what happens if it stabilizes and comes back? I mean the company did just recently reiterate guidance for 2011 at $0.93 EPS and 50%+ revenue growth. So maybe things aren't falling apart like the shorts want you to think. If the stock drops below $11.8 and stabilizes or bounces back, how fast do you think the shorts will cover? And how long will it take for them to cover? Remember, 60% of the shares available for trading are short. That's a lot of buying power.
FCX is red today probably because of local rebalancing done by hedge funds. Don't worry about it. GDXJ is also red today.
But the key thing to notice is that the TED spread took a large dive today, down to 52.6 (that's why IRE is probably rallying). TLT is also down big today, and so is $USD index. The CDX.NA.HY spreads are down again today. So the rally lives on.
SORL = looking good. SKUL = not so much. IRE = ugh why did I sell?
ReplyDeleteI was wrong about BAC.
ReplyDeleteWho would have guessed you could lose on HEK but gain on DANG?
CP the only Bakken play I know is KOG, but PDS may be involved as well.
major volatility in SKUL going on. I wonder if this has to do with the share lockup.
ReplyDeleteIRE was the play here fellas. It sure looks like it's going significantly higher.
I'm liking how SKUL can't break below $11.8. The more times they try to break it down and fail the more likely it is that the huge short position covers.
ReplyDeleteDon't forget....The FREE Landry 'Week in Charts' is in 26 minutes.
ReplyDeleteThe link in on his site.
"The more times they try to break it down and fail the more likely it is that the huge short position covers."
ReplyDeleteThis same thing happened with MITK down around $7 and was the reason I hopped back in. It's the same reason to get long CSTR at $40-$41...
SORL - this chart looks really good. Love the gap higher after a consolidation at the bottom and after people gave up on it.
ReplyDeleteHW is also an excellent chart. I think it has clear sailing here. I may add to my position.
ReplyDeleteGuys - this is the classic fakeout trade if it happens:
ReplyDeletehttp://www.benzinga.com/trading-ideas/short-ideas/12/01/2274334/is-skul-a-solid-short?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+benzinga/trading-ideas+%28Channels+-+Trading+Ideas%29
The issue with this trade is there is 60% of the entire float short the stock right now. Most likely all of them are thinking the same thing: the shares of insiders were locked up for 6 months and now they're just going to dump the stock. So short the stock to oblivion because they will sell it and further depress the price.
The problem in my mind is what happens if the insiders don't sell at these prices? They own a huge stake in the company and maybe they actually believe in the company. So let's say there is some selling and the stock then drops below $11.8 for a second. Well, what happens if it stabilizes and comes back? I mean the company did just recently reiterate guidance for 2011 at $0.93 EPS and 50%+ revenue growth. So maybe things aren't falling apart like the shorts want you to think. If the stock drops below $11.8 and stabilizes or bounces back, how fast do you think the shorts will cover? And how long will it take for them to cover? Remember, 60% of the shares available for trading are short. That's a lot of buying power.
Wow what a rip higher in OMX and IRE. nothing like seeing the trade and not taking it.
ReplyDeleteFCX is red today probably because of local rebalancing done by hedge funds. Don't worry about it. GDXJ is also red today.
ReplyDeleteBut the key thing to notice is that the TED spread took a large dive today, down to 52.6 (that's why IRE is probably rallying). TLT is also down big today, and so is $USD index. The CDX.NA.HY spreads are down again today. So the rally lives on.