FocalEquity
2:47pm
Idan shares his market statement. Here’s a copy:
Good Afternoon Traders & Investors:
DISCLAIMER: This statement is for educational purposes only and not a recommendation to buy or sell any particular financial instrument.
Over the past 4 months the market conditions have improved somewhat as unemployment fell, housing stabilized and a deflationary spiral has been averted.
That said, the stock market trades in anticipation to how the economy is going to do for the next 6 or 12 months. It is still uncertain whether or not we will get a full recovery and we believe the stock market has gotten ahead of itself at this point in time. 2, 3, 4 months of upside in housing and job market does not a trend make.
With the S&P nearing onto the 61.8% Fibonacci retracement of the whole bear market, close to 1230, the market is overdue for a correction and is likely to get one very soon. We are slightly positioned more short than long but have hedged our bets either way. We do not believe that shorting the market as a whole or the SPY is the way to profitability (do not fight the trend) but shorting individual extremely overbought stocks in the tech, financial and material sectors hedged by longs of oversold stocks in retail and material sectors will provide strong profitability. We also believe that swing trading compared to intraday trading will be more profitable due to low volumes in the market.
In the short term, we are not certain that the market has started a longer correction or reversal pattern. The S&P does not have to touch the 61.8% retracement to fall down but there have been no signs of follow through on the 2.3% down day on Tuesday. We would like to see a confirmed break of the $118 level on the SPY before we can consider a start of a correction.
Today one of the trades we made was short AIT and go long ANW. We made a few other trades that we disclose on our Alerts & Analytics service on www.focalequity.com
One of our stocks that we went short (RDWR) is down over 6% today.
1:24pm
Market remains strong and the XLF is moving with it. That said 15.50-15.52 was strong resistance (and we are trading slightly above it with low volume). We went short there, with a stop above the second strong descending resistance at $16.65. Here’s the 60 min:
Idan and Tony deserve credit for their bet against RDWR. The stock tanked over 8% today and FE Alerts&Analytics bagged 6% return on this short position when the position was stopped out at $21.15. See what they and their proprietary investment model did below:
Unlike most of the online investment services that operate in a black box. FocalEquity Alerts&Analytics is run by a tested and transparent investment model based on fundamental valuation and superior technical analysis factors. Just today, RDWR proved that why should people begin to invest with this service.
SYMBOL: RDWR (Radware Ltd.)
We shorted this name back in April 5th. The first round of short we came out pretty much flat because the stock didn’t correct. Then, our model convinced us again. This is the second email alert (which is also posted on Alerts&Analytics subscriber forum) we sent out to our subscribers about three weeks later on April 22nd.
Dear FE Alerts&Analytics Subscribers,
We got stopped out today on RDWR at $22.44. However, we are immediately shorting this company again with the maximum cap of our individual position percentage of 5%.
Short at $22.45 with a stop at $24.70
Target: $18
There two two main reasons for this bold action:
1. The chart has not changed. The upmove that this stock exhibited is still parabolic and it is clear to us that the stock is hitting strong resistance at the 61.8% retrace from its all time high.
2. We know that fundamentally, this company is not well positioned at all. First of all, they specialize in an area that is generally neglected by bigger tech players – network deliverance. This sector as whole only has about two players with a total marketcap of just $1 billion. The company is heavily dependent on a sustained tech spending recovery, a recovery we have NO faith in at this point based on the broader macroeconomic data.
Specifically, we are referring to our original fundamental valuation analysis results below:
This is a stock that shot up due to massive short-squeeze and earnings surprise. However, there is currently a fairly strong consensus among four major fundamental analysts that the stock has shot up past its fair value by a significant amount. With a 12-month fwd PE of almost 25, the company is trading right at its growth rate. 4 brokers on Wall Street has an approximate similar consensus that the stock should be trading between $18.50 – $23.00. The stock is currently trading at nearly over $22. The stock has gone up huge in the past 3 months and primary reason is that the EPS went from -31 cents to a positive 25 cents and the next year’s EPS projection is set at 82 cents. This obviously caused a short-squeeze in the stock since now it will take over 10 days for short sellers to cover the stock. However, all of this surprise is now fully priced in and the stock is trading at a unsustainable level. We expect the stock to pull back about 15%.
_______________________________________________________________
Idan to address traders and investors on market conditions and hedged trades at 12PM EST. You can watch his report here too!
He will also stick around to trade live! **Make sure you’re online 3 minutes prior to statement**
10:42am
LUV retested it’s broken channel support as resistance, nice place to go short if you believe we are getting a correction (60min):
9:39am
Moving FSLR stop now to 143.50 as it shoots up into the 150s. Also the SPY will find resistance at $120.60-120.65 which is also 61.8% retracement of the move lower 2 days ago:
9:42am
RDWR was one of my shorts on Alerts & Analytics now down 9%… we’re very happy. I really hope more popele subscribe so they can make some solid money. We will disclose some of our trades on our live trading at 12pM.
9:34am
FSLR continues to move up to 148 here. i’m moving stop to $140.75.
9:24am
FSLR will be completing potentially it’s inverse H&S on the daily as it pushes up beyond hte 140 level after earnings. I will keep my stop at 136.50, bought this stock at 124.
3:05am
Futures slightly up, but there is a lot of important data coming out tomorrow:
1. Jobless Claims at 8.30am
2. Natural Gas report (keep a close eye, because UNG might be breaking out tomorrow!)
3. A lot of bond auctions (7yr note at 1pm)
4. 2:30pm Tim Geithner speaks
This Market has F** me both the ways.. i think i should follow Morris. Morirs, plz keep posted yr trades.
don’t follow Morris unless you have same capital to use! Morris is surly blessed
my account is not that big (less than 300k)
Hmmm, I see that Idan is shorting the XLF now. I might follow with an entry in SKF with a fairly tight stop. Feels pretty dangerous though.
1000 SKF @ 17.29 (scary!!!)
Alot of economic news tomorrow morning if we continue to melt up would it make sense to short the SPY going into Friday..If the news is bad that is !!!!
Melting up can we tag the 121.50 double top
In FAZ @ 11.28 risking .10
———— GPX.TO ————- one ive followed for year. rode it from $0.27 to $0.39 …… sadly
missed the next move. think it is now ready for another move. if off-shore drilling slows then
we should see another move in oil prices and these guys have ok holdings in a safe climate.
–GOOG– finally breaking out of whatever stalled formation it was in. it may be ready to run……at least to 560. just my opionion
“finally breaking out”
lol, what charts are you looking at?
There was a 7$ price swing today, check out the keltner channel (21, 2.5, 10) setting…you’ll see some basing (in the past) and then it shoots up despite the moveing avgs death cross..gotta go…will see how tomorrow goes per window dressing…
20 and 60min… watch
Idan, your stop is at the 61.8 retracement exactly.. Why so precise? Shouldn’t you give your self just a few more cents?
where do you see 61.8% retrace… i went short maybe at the 61.8% retrace.. but my stop was at 16.65/16.66 on the XLF.
Idan, what’s your thought on TZA? Is this a good entry point?
Hi Idan,, thanks for the commentary
I meant that the XLF height of the year was 17.12 ,, the low of the rescent drop was 15.92.
16.66 is the the 61.8 retracement of this drop from the heights..
I think maybe a stop at 16.68 or so, would have given a little wiggle room.. just a bit
.. Do you consider that wise?
I now understand that you shorted the 61.8 retacement of the 4/21 high to the 4/27 low
I think the 20 sma on the daily is there as well…
Is the audio over ???
Does anyone understand what is going on with natural gas. HNU.TO biggest down volume ever. Sitting on a base at 5.10, possibly the last down flush?
BUY 1000 HNU.TO @ 5.18 (thinking long term)
Seasonality working against you. You buy ng in late sept when traders show up for work and
realize its cold out….don’t laugh, it happens every year. Same time gold pops too.
Thanks Jim, I’ll have to consider that since you are extremely good at this.
Another powerful day for earnings reports. Some of the most notable
BIDU FSLR IRBT AKAM ADEP BC ABG RAS ROC ILMN DDIC KEI CLW EVVV ZOLL DIVX SFI HS BABY AXTI ITRI SAIA IFSIA CLP TKR BWA OZRK HURN MTH AP HRS SCOR FTI KAI OMX ORLY KEX
The worst I could find today was HAR. This is the one I’ve been short stalking for a long time. Gonna close on/near it’s LOD.
Shorted RIG this morning. Adding short BP right now.
If GLD closes below 113,5 tomorrow, i will go short .
DNDN –30% up
DNDN- hitting myself in the head for not putting on those trade ideas this morning. Ugh!
ALNY-making a move
To short or not short WYNN… that is the question at this last 10 mins.
beeeee careful … when is earnings???!
4pm ET.. so like in 6 mins..
Stocks are surging.. earning leakage?
I took a very wussy short.. very very little of it.. @ 93.20.
When I take wussy positions, it usually goes the way I want it to.
When I take BIG risks.. it always screws me over. Strange, but it’s always been the case.. same at Casinos.
seeing it’s a casino stock…maybe that fits?? lol
Wynn went no where. up 3.5%.. and now up 1.5%
CAGC- looking like it’s right at the neckline of a H&S on the daily. Will short this and hedge with going long POT
hmmm..on 2nd thought, I think I’ll wait until neckline is broken on CAGC and/or POT breaks HOD on the 10 min.
Anyone looking for a list of over 100 silver companies, here you go.
http://seekingalpha.com/article/200876-2010-list-of-silver-mining-stocks-and-companies?source=hp_wc
Nice list, thanx. Got anything for PGM’s?
i’m going to hold everything overnight. short term positions (all opened today) are:
2000 SCO @ 11.45 avg
1000 SDS @ 29.00
1000 SKF @ 17.29
have a good one!
I’m in FAZ @ 11.28 .. Also holding
GL
hey morris, still holding a couple calls of GS
…. Also, Got out of UCO at 13.70… Another fine day… Thank you sir!! I’m scared to follow you into SKF though…
Anybody buying MON? terrible chart but massively oversold…. Will add small position tomorrow….
VE- Price action today stunk big time. Would like to wait for confirmation on today’s inverted hammer to see if reversal is on the way but today might have been the day to go long with a stop below the 31.31 horizontal support which held the previous 3 times it was tagged. Made many gaps (ups and downs) from May-July last year so there could me multiple support levels in the 30 range. French company so may be affected by crisis across the pond but could be a long term hold with a juicy dividend. Had it in my IRA account until I let go of it when it breached 38 last year.
FIZZ- Hit 11.82 resistance today then got knocked down although it could make another hit on it. Stronger resistance resides @ 12. So one can look to go long if/when it breaches 11.82 but near term upside potential is only about 1.5%. For big boys, might not be a bad idea.
VMW- I don’t know how to read into this but EMC continues to buy shares as the price goes higher. I don’t know if it’s just EMC trying to maintain a certain % ownership or what.
I’m getting creamed both ways here. My longs and shorts are getting hit both ways. If not for C and ALNY, I’d have a lot of explaining to do to the missus. Certainly don’t want that! LOL
MSFT-everyone is saying HPQ & PALM deal is a bad for MSFT. Chart though is showing a potential for an inverse H&S. Could be more defined is MSFT actually dips to 30 before moving back up.
criminal probe launched against gs, just now.