Now that the market has lightened up a bit on the "student body left" (or right) trading ("sell everything! buy everything!") we can spend some more time sorting out good charts from bad. Except in times of extremes - this is a market of stocks, not a stock market. Below I'll break out some of the stocks that we made some changes to last week, and others of interest with commentary....
1) We had been holding off on adding to
Emergent BioSolutions (EBS) as noted
Thursday waiting to see if it was reading to break up, or down... the answer the next morning was down. The answer was down, but after flushing out to $20 it bounced right back to $22, where
we took the position from 1.3% to just under 3%... later in the day as the stock bounced near $23 and seemed strong we added more and took it over 5%. In a perfect world I'd like to see this name recapture $25 in short order - I have some limit sells waiting @ $26... we have a lot of locked in gains here, and I'd be comfortable with the name down to $20 which was Friday's intraday low. If that breaks we'll take some losses from Fridays $22-$23 buys and wait for the dust to settle.
2) We were able to add a second batch to our initial stake of
Thoratec (THOR) - both this
week - to make this a 2.9% stake. I like buying this chart since I'm not a pure momentum chaser and prefer stocks in uptrends consolidating instead... but each time you buy this setup you run the risk of a break down (which is why momentum chasers never buy this chart). I feel comfortable up to $26.50 on the downside which were early December intraday lows - below that I'd have to take some losses and cut bait since it could fall to $24 or so. The stock was downgraded Friday but volume was not immense...
3)
EZCORP (EZPW) was an interesting stock this week - our limit order @
$17 hit Monday so we were able to get out of part of our position but the stock fell through the floor this week on
fears of Obamamania touching it - but in a bad way. Ironically, its peers have more cash advance store exposure but EZPW fell more than its peers.... I added some in the high $14s that we are already down on - but since stocks below resistance can stay there a long while, I am not going to add more here in the $13s. I'd rather add over $15 when the stock regains its mojo.
4)
AeroVironment (AVAV) - see Thoratec chart; exactly the same commentary except we have the backstop of the nanny state (federal government) behind us; we added some late in the week as it bounced around at its 20 day moving average in $35s, I'd like to add more around $34 or even better $30.
5) 2 names we added this week -
Indian bank HDFC (HDB) and
small airline Allegiant (ALGT). Thus far both have held in ok considering how bad the market was; we
snared HDB on the Satyam scandal and so far so good; although if the market weakens people will flee risk and the stock will break down - it will have nothing to do with the company; when the rats run they sell everything. Earnings are this week.
Allegiant is so far ok, but has some risk to it... despite oil falling through the floor last week the stock did not respond in kind (it should go up on that news) - further hedge fund manager Doug Kass went short Friday it appears and probably a lot of people jump in behind him. I'm willing to hold until $38 and then we'll have to cut back if it breaks through. I'd like to see it back north of $42 and hold it to feel comfortable.
6) Interesting week with
Illumina (ILMN) - we've been waiting for a breakout after a long period of consolidation and it sort of did a very similar headfake as the market as a whole - we
jumped in Monday when it "broke out" (>3% position) but in our "better to be safe than sorry" ethos we said the stock could risk breaking down and
we cut right back to a 1.1% and took a small loss...
