1) HEW short @ 31.39. It shot up to $32.50ish as I held on then it fell back to $30. I'm still short.
2) ANN short today @7.82. Looks like shorts were squeezed hard today when prices shot up on heavy volume. This seems to be a classic short squeeze that failed to trigger enough stops (latest high). It will probably go above 8 in the next couple of days but I can afford to wait. My position on ANN is much smaller than usual due to the high probability of hitting 8+ but prices and my indicator is showing unequivocally that price is going to fall shortly.
Update 5/20/09
Add to ANN short position at $9.10. The insane buying by small lots (100s of shares) this morning gave a clear cut selling signal. I took it and added a large portion to the position. Now averaging short position @ $8.73.
Add to HEW short position at $30.35. Something strange is going on this morning with major indexes propped up by small regular lots. Market manupulation at its best. Another thing about market manipulation is that it never works for long. So I faded it and added to HEW position.
Initiated new short position on CHS, selling at $8.55. Some broker upgraded the shares which is a clear selling signal. The consumer discretionary sector was the best performing sector during the rally. Normally I wouldn't short the leaders, but based on my volume reading the surge in this sector is mainly due to small retail buying, which I'll fade without hesitation.
Initiated new short position on BAC (small) @ $12.11. GS upgraded BAC which means they are selling. It came so predictably that BAC raised a large sum on a stock sale blah blah which means the upgrade is nothing but a pump-and-dump by GS. I used to have at least a little respect for GS analysts but recently they proved that they are as crooked as the other "research" "analysts".
Hi, i found your explaination very interesting!
ReplyDeletemay i know your target price for HEW? just chekced a few tech indicators but i'm not convinced that it will fall sharply...
as for ANN, yea i'm seeing it will fall as well, maybe a few days later if not tonight...
Hi Tivos,
ReplyDeleteI am primarily a system trader and I don't rely on indicators since they are all price transformations of one form or another and they are all lagged due to the nature of moving averages which most of them employ. The only "indicator" I use is a volume-based statistic that I programmed myself to detect large buy orders, as well as the trendline, which I draw a bit differently than others: I connect the lowest low with the low next to the highest high (in uptrends), but on one condition that is it does not touch any price point in between. This way I get a much milder trendline which offers higher probability trades (albeit with lower profit potential). My profit target is based on the latest swing low then the inverse projection of the swing high based on the trendline (in case of short selling) and I scale out almost all of the time, which means I will keep a certain portion of the position as long as price is still going my way.
Take HEW for example: the latest swing low is $29.17, which is my first profit target. The "all-out" target is the inverse image of the latest swing high, which is $27.50. This is a high probability trade since the 200DMA is unsuccessfully tested 3 times. Some broker research upgraded the stock several days ago causing a spike due to their brokers positioning client funds in, which is a perfect opportunity to short or, if you were already short, add.
ANN is different because it is heavily shorted. In fact it is one of the most heavily shorted stocks on NYSE. This presents significant dangers of a short squeeze (one of which happened last Friday). It could easily go up another $3 to its 200DMA due to the current amount of short interest. Therefore prudence demands a smaller-than-usual position. If ANN does break down I expect it to go down to around $6. If the trendline is broken again (which is somewhere around $7.75) on close I'll consider adding to a bit to this position.