I haven't posted since revealing my short positions because I haven't made any trades...until this morning. In the future I'll try to do better at mentioning my day-to-day thought process while watching the volatility in the stocks I short. For now, just know that my strategy (short stocks that have run too far too fast, had their first down day, and wait until the position is profitable to cover) is holding strong. Watching HSNI continue it's uptrend after the first down day (12/24/28) of it's initial run hasn't been what I'd call pleasant- but patience is the key. Below is a 5 day, Think or Swim chart of HSNI I took a screen shot of this morning. Notice that I covered 150 shares at 9:45 this morning (a profitable trade from my 150 share short at 7.20). I still have the original 250 short that I'll look to cover for a profit at a later date (unless of course it completely tanks this afternoon).
My reason for covering 150 of my 400 shares was fairly simple- I had a profit from those shares, the stock opened in near free fall once the volume picked up, and it hesitated around 6.73 longer than I was comfortable with. Covering 150 shares gives me two options: Re-short the 150 if HSNI retests it's 7.50ish high and fails, or cover the remaining 250 at a lower price should it continue to fall (as I'm typing, it has recovered to 6.84- the time is 11:18am EST). Looking at the above chart, you may be wondering why I wouldn't cover the whole amount somewhere in the $6 range. If that chart representedw more than just a few days, I'd agree with you (though I wouldn't have shorted after such a small run). If you take a look at the 20 Day chart below, you'll see that HSNI has quite a way to go before retesting any yearly lows.
I'll wait to post any charts of MAXY until it shows major signs of weakness. When it eventually breaks through the mammoth $8 support, things should get both interesting and profit forming. For now, it's creating new highs (though none to write home about).
Please feel free to comment and ask any questions (about the charts, strategy, missions, etc.). I'll be posting about future mission trips and projects as they emerge. I'm seriously thinking about taking a team to the Amazon and partnering with this ministry in the summer of '10. It would be great to profit enough from trading to fund that trip (costs about $3000 for two weeks, including everything from flights to bug repellent).
Patient Trading,
Evan
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2 comments:
Did you short HSNI right at the open today? You must have since it opened at $7.21 and tanked in the first 60 seconds of trading
Yng,
Thanks for the comment. No, I did not short at open today (that would have pretty much been dumb luck- which I've done in the past with CNEX and PDO on the mornings they tanked, but it's not my current strategy). I shorted 250 shares at $6.85 on the 31st at 9:32 am and another 150 shares at 7.20 on the late day spike. I waited through the next few trading days until this morning to cover 150 shares and let the rest ride. I'll re-short the 150 shares if it retests 7.50 and fails, though I think it's more likely I'll cover the remaining 250 short shares somewhere in the upper 5s. I'm like you in that I have an easy time entering a trade but difficulty on the exits.
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