Thursday, January 11, 2007

Bearish but still long. IMKTA, AB, FTK

I learned my lesson some time ago when I sold out a position for no good reason only to watch it rise 20% in a matter of weeks.

Sure, I've been bearish about the market but that hasn't stopped me from holding my long positions. In fact, I even started a new long position at the height of my conviction that the market would turn lower. I found that buying one of these ultrashort ETFs was the key to my mental well being. For instance, I purchased some shares of the QID and put in a very tight stop. If the market went up I would be stopped out, but still have my long positions. If the market went down I would make 2% for every 1% the QQQQs went down. That gave me some peace of mind and a feeling that I would have time to exit my long trades.

As of now I don't have any QID shares and I'm currently enjoying the rise of my recent long position. Check out IMKTA.

I'm sure a pullback is in the cards but IMKTA has moved up almost 10% since I bought the flat base breakout.

AllianceBernstein is a model of strength. This one has been easy to stay long.

Like I posted earlier, the massive decline in crude prices has hurt everything connected to oil. I have been looking for an oil pullback and was ready to cut my FTK shares down on such a price break. Considering the beating that many of the other oil stocks have taken, FTK has held up pretty well. However, I think the bad weather in the Rockies will hurt Flotek's 4th quarter and expect them to report an EPS towards the lower end of their estimates. Who cares, the shares I still own are all profit. When oil turns around I'll add some more. Here is the chart. Notice the the recent distribution days and wild price swings (today especially). I'm looking for it to get down to the 21.50 area.


prosperingbear said...

Excellent chart of Flowtek Industries; I wrote very bearishly in my article 'Stocks Headed Lower And Interest Rates Higher In 2007'

Jan Allen

Paul Stiles said...

Thanks for the link Jan. Good luck and don't let the bull run you over.