Dark Horse Hedge
By Scott at Sabrient and Ilene at Phil’s Stock World
Buy to Cover HUSA at the market Friday, August 20, 2010
The road to nowhere has led us to a nearly 15% profit on HUSA in a little over 2 days and so we are electing to take that profit. As we have discussed in past issues, HUSA is lacking a solid fundamental basis for the current stock price and so we will continue to watch it for another Shorting opp. All things being equal, this stock should eventually be properly valued well below these levels but we are content to take 10-15% at a time while it dribbles between $9-11.
On a side note, one of the DHH Long positions, GME, reported $.26 versus $.27 expected Thursday. We have GME covered with a $20 option and still like the mid-term value of the stock. So we are happy to continue selling calls and earning premium in the DHH portfoilo.
The S&P 500 is in a new downtrend as you can see on the chart. The 12-26-9 MACD has broken the signal line in a southward direction confirming for the short-term that we remain on the "road to nowhere". Today being option expiration day could provide plenty of volatility but as Phil Davis has pointed out, a close below 1070 could spell a test of the 52 weeks lows so we will continue to monitor the market for opportunities. DHH is now tilted to the SHORT side by virtue of the calls written on the long positions earlier in the week.
