AllianceBernstein (AB): I wouldn't short this.

I have used Telechart 2007 and the Blocks Player for a few months now. As part of my membership I get a daily chart analysis of some random stock or index that one of the Worden brothers think is important. I usually don't pay attention because I have no interest in their technical analysis methods.

Yesterday, however, they presented the chart of AllianceBernstein (AB) and claimed that it was a short play. Sure, the current congress is looking to change the tax brackets of some companies, like AB, but this is not a sure thing. I thought that I would look at the chart again and see if shorting a company that pays over a 5% dividend would be a smart thing to do.

It looks like there has been some erratic trading lately, but nothing that raises any red flags. Just keep an eye on the price as it reaches the key support levels shown in the chart above. Can AB get back down to 78 to 80? Sure, but I expect the entire market to head down so shorting a company that pays over a 5% dividend doesn't seem too bright to me.

Throw a dart and pick another stock to short.

Whipsaw

This whipsaw action is crazy! I'm glad I didn't panic and sell my QID position.

Looks like I missed some upside action with AB, but not much. They blew away numbers and were rewarded with a measly 1.5% gain. It seems, as suspected, the good news was already priced into the stock. I'll be looking to get back in on a pullback.

Why I sold AllianceBernstein (AB)

Besides the fact that the market is turning sour, I sold AB because of several factors.

First, AB has been getting more press lately. This used to be a quiet little stock that nobody paid attention too. Now I keep reading about how this is a great place to put your money if you want to play the world markets. With higher visibility comes higher expectations and the way the market has been selling the news I didn't want to be on board during earnings (Jan 24). Last quarter AB reported blah numbers and the stock didn't budge. Since then, the stock has really ramped up and is now poised for a pullback.

Also, the chart shows some signs of churning. This is when an above average amount of volume is accompanied by little or no price movement. This shows that the institutions are exiting.

The bottom line is that I rode AB up for a 23% gain. Might as well get out while the gettin's good.

The Spectacular Collapse of Amrep (AXR)

I wrote about AXR, #1 on the IBD 100 list, a short time ago and compared it to Empire Resources (ERS), a former #1 on the list. I predicted a collapse and that is exactly what we got today, with Amrep dropping by 22%.

The volume on the Nasdaq was lower than on Friday so we didn't pick up another distribution day. Nevertheless, the price destruction of AXR was the final piece of my market top puzzle, with US Global Investors (GROW) having already tanked. I therefore sold out another long position, AllianceBernstein (AB), with a nice 23% gain. (I got out of my IMKTA and HRZ position last Friday.)

So what do I have left? I'm still holding those QID shares I bought at last Thursday's open and a small core position in FTK. This makes 90% short right now. I plan on adding to that QID position after the first short covering rally.

I'm also thinking about shorting AMK at the first short covering rally, which should be huge since the short interest increased this last month to 84%.

Damn, this stock market stuff is sure fascinating!

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.

Oil spill

Holly cow! There was some crazy action out there today. I must admit that the wild ride definitely distracted me from my day job.

Anything remotely connected to oil and natural gas got absolutely smashed today. I cut my Flotek position in half and will wait and see about the rest. While the volume in FTK today was well above average it didn't come close to the high volume panic selling I witnessed in some other small cap oil service stocks (see ALY and BTJ, which found some support at their 50 dma).

To make matters worse, I put in a limit buy order of 52.32 for the QID when the market gaped up this morning. I missed that huge reversal today by 0.15. Jeez! Oh well, judging by the drops some of the market leaders had today I think there will be some more opportunities.

At least I still have good old AllianceBernstein.

I'm getting superstitious.

I haven't posted any buys that I've made recently because it seems like the market has been on a roll and I didn't want to jink anything.

I bought AllianceBernstein (AB) and Diodes Inc. (Diod).

Two days after I bought AB, someone downgraded it and it dropped some. It wasn't alot and I decided to hold on and see what happened. Today Goldman Sachs gave it a big upgrade and it looks like my patience has paid off. Did I mention that AB pays a 5% dividend?

Diodes Inc is a massive growth story. I'm late to the game but many think that there is still plenty of upside. I bought it when the chart closed the gap the other day. The big drop on high volume was caused by the company anouncing that they would take on 200 million in debt for possible acquisitions. They will only be paying 2.25% in interest for the loan, which is due in 2026. You can get savings accounts with higher rates than that.