Missing the moves in BCSI and CROX this past week allowed me to come to a conclusion about current market conditions: the small list of realy strong momentum stocks are not pulling back much in this market. My best guess as to the reasoning for this phenomena is that there aren’t a lot of high flyers right now, so the few that do exist are getting bought up quickly by the momentum crowd.
Based on this analysis, I decided to enter LFC early on today’s breakout. The stock. along with a few other Chinese stocks, was on my primary watchlist last week at a breakout-pullback play. Normally, I would wait for a pullback into the $65-66 range, but did not hesitate this morning to buy on the opening gap.
I bought 600 shares of LFC at $70.68 and sold half of my position at $74.80 for a $1236 gain (+5.8%). I am still holding 300 shares.
I also bought 500 shares of SDS (leveraged short S&P 500) at $54.75.