In last 8 trading days we have regained 127.95 points or 7.06% from low, that was also a very fast rebound.
Markets are highly unpredictable all the time, all we can do is be prepared for a sharp drop and be positioned for any reversal which may take place.
ECB started this turnaround and BOJ gave the much needed boost, so we have moved above many resistance points.
Market seems to be ready for many more upside moves, 2000 is first resistance then 2040 is next in S&P 500, that is a nice range to shoot for.
World economies are a mixed bag, India doing well, while China, US, Canada, EU are showing growth but @ lower pace.
ECB upcoming stimulus in March is a given, US Fed has a wait and see approach, it may be more wait.
Many sectors have participated in this rally which was extremely broadbased, even bank stocks have a pulse.
Still many earnings report are coming which provides ideas to go for, GOOG is among the important one this week.
Strength needs to be bought and stay with, important to know the fundamental of each holding. as there is always too much noise to deal with.
Patience was required to deal with slump we had and it paid off when TAPE turned UP.
Diversification, conviction needs to be there to optimize returns.
Sometimes eliminating weaker results are necessary.
Deployment of funds needs to be in the right place.
Good luck with your own strategy.
BLOG does NOT give buy or sell.
Saleem
18 comments:
Hi Saleem,
Sold SPLK @ 46.11
I just don't think it's the right time for this kind of stock.
Stocktrader
Hi Saleem,
Sold FIT @ 16.81
Using this small pop to sell. I'm concerned the market perception of competitive/fad factors will continue to weigh on the stock.
In general, there's not a need to reach for risk here. There will be plenty of time to buy growth stocks if the market signals a shift in sentiment.
Stocktrader
Hi Saleem,
The only stock in my portfolio is BBRY, and I have the ultra-long treasury TMF. I want to buy RLYP near 18, and I might consider a DKS repurchase after I sold that only on a technical idea that ended up reversing.
I love LNKD into earnings, but the valuation makes the risk/reward skew poor. The market could key on any bad metric to make the stock drop 20%.
Stocktrader
Hi Saleem,
Bought DKS @ 38.59
It has good valuation and the wife's seal of approval :)
As I mentioned in a prior thesis on DKS, its merchandise is attractive on many fronts including sports equipment and fitness apparel, both of which appear to be the "hottest" parts of consumer spending.
Stocktrader
Hi Stocktrader,
Good luck with strategic selling and purchase of DKS.
RLYP focus is good.
Good luck with BBRY and DKS.
Saleem
Hi Saleem,
The early read on the market is that "Fed easy" stocks are doing very well. The PMI data today certainly showed more economic weakness thereby putting increasing the chances of Fed easiness. I would note gold is putting together a string of good performances.
Stocktrader
Hi Stocktrader,
Fed read on economy was premature.
Gold has surprised me for sure.
Saleem
Hi Saleem,
I should have a knack of selling a stock in the morning right before a bigger move: BAC on Friday, SPLK today...that's ok, trying to stick with a plan.
Stocktrader
Hi Stocktrader,
Selling any stock anytime has its pitfall.
When market improves most stocks go up.
Not good to look back,focus on next bright idea,you do have a stock picker @ home.
Saleem
Hi Saleem,
Started back up a position in RLYP @ 18.80
I may add more later today or tomorrow if I really see a bottom in place.
Stocktrader
Hi Stocktrader,
I follow your trades and see how you view the market. I was really surprised that you sold SPLK this morning. I believer you have a broader picture of market before you. So you may be right in the long run. I know it is so difficult to make money in this type of market. I have been trading XIV and UPRO. Whenever I got a chance I booked the profit. Just to be at a safer side.
I still hold RLYP @ 20.80(750 shares) in my retirement account. Hopefully things will turn around. I may also buy more at 18 to average it down. IBB has been hit so hard. I believe the Presidential election has something to do with it. Good luck.
Joseph
Hi Saleem,
Hmm...didn't expect this but rebought FIT @ 16.07
Stocktrader
Hi Joseph,
With SPLK, it is all about future value because the current "earnings" are meager. I worry about stocks like this where valuation is determined mostly by the investors' imaginations. When times are good, it can be easy to make a case for how much you should pay for this kind of stock. Unfortunately in this environment, I'm not sure what exactly to do with it. The earnings report from NOW makes a scary case for all these new technology stocks... I'm hoping to get another chance at SPLK in the low 40s--I still view this as the "safest" extrapolation in the whole space for sustained 30%+ growth for years to come.
Stocktrader
Hi Stocktrader,
Good luck with RLYP and FIT.
Saleem
Hi guys,
Added to RLYP @ 18.86
My plan over the weekend was to buy tomorrow morning when I felt the biotechs could be completed washed out ahead of Thursday's congressional testimony. I really think the CEOs will make a great case for why cures cost so much, at least to the point where it will be difficult to enact blanket policies against them. This could spark a huge short-covering/buying rally in these stocks that have been beaten so much. With the Fed looking ever toward easy policy given the sluggish economy, I think biotech can rise again :) (and RLYP isn't even biotech anymore, they are now just a "drug" company with sales started).
Stocktrader
Hi Stocktrader,
Added 50% CTSH @ $62.59
Saleem
Hi Saleem,
Good luck with the CTSH addition.
The market is really tough right now. I'm trying to wait for opportunities to come to me instead of forcing something. I feel like nothing is going to suddenly run away...
Stocktrader
Hi Stocktrader,
Good luck with RLYP add on.
Yes...this TAPE is lot more challenging than 2009 to 2013.....
Saleem
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