I don’t have much to say today, so I’m going to use this post to answer questions from e-mail and comments.
What do you think of GTLS as a short?
I certainly would not buy right now, but not sure I would short either. While the it printed a big down bar and the bounce has been weak, the breakdown did not break major support levels. The stock is still in an uptrend.
While the probability of the trade doesn’t give a great edge, since the risk is well defined and small, I would not be opposed to using this as a pioneer short trade. A stop could be placed about two points away, above the recent high. I would only make this trade with a small position size.
How far would you wait for a pullback in FSLR?
I mentioned FSLR as a bullish setup requiring a pullback. I actually took a small “pilot” position at 303 today, but wouldn’t make a big play until we see a pullback into the $290-300 range.
Does it concern you that MON‘s OBV is breaking out to new highs?
This was in response to my MON short. OBV has not made a new high since January. I would not have made the trade if OBV was at a new high.
A question related to my TRLG trade basically asked how I define my target with a breakout into new highs.
That is tricky. When buying on the pullback, my intial target is usually the recent high. I’ll take some off and then move my stop up. If I get stopped out, I’ve made a profit. However, I am still in play if the stock moves higher. At some point the stock will become very overbought, at which point I might take off the entire position and wait for another pullback.
What do you think of oil right now?
I believe oil (USO ETF) has become a speculative play that will pullback soon enough. The commodity is very overbought. Historically, this is the point that we see a pullback. However, I am not confident enough to short. I will be a buyer on a pullback to the 50 day MA *and* successful test of that range.
That’s it for today. I may do another Q&A post tomorrow. Feel free to comment or e-mail if you have a question.