Well, it does not appear to be a great day in the markets. What looked like ending yesterday would be a bullish run today has turned into a nightmare after weapons have been fired between North Korea and South Korea. The two countries have put a dent in the markets this morning. Our holdings in FMCN and VRGY are hurt by it. FMCN, luckily, has opened not too far below our own entry. I sold my final 1/2 at 24.55 for 0.5% loss for an average exit at 24.98 for a small gain overall. VRGY has opened at just neutral for us as well.
We are looking to short a company I recommended to some yesterday as an Overnight Trade…
Short Sale of the Day: Brown Shoe Co. (BWS)
Analysis: We got hit with a crisis that could not be foreseen, and it is allowing us to pick up short sales to hedge our losses. Anything that you see with major green movement is a good short sale to start the day. One of these such companies is a stock that I mentioned as a possible Overnight Trade to my new .png)
Oxen Group followers. The stock is up over 10.5% in pre-market after beating EPS and revenue estimates.
The company reported nice earnings with a 15% rise in sales, The company, additionally, well exceeded estimates set for it for analysts for FY10 and FY11. The company looks set for a nice run for the rest of the year; however, today, it will most likely pull back from the open. A Korean war may be on the brink, and that is definitely very scary for investments today. Many holders will want to sell the stock off the bat to collect gains and others will sell because they think everyone else is going to sell. We can take advantage of this by collecting short sales on the stocks, selling calls, or buying puts.
I like BWS for some significant movement downwards, additionally, because the stock is heavily overbought and has popped outside of its bollinger bands at current levels in pre-market trading. The stock’s RSI will jump above 65, and its fast stochastics were already moving into an oversold range and should be topping out as well. Overall, this stock is technically overvalued as well.
It looks like its time to short Brown Shoe…get in after small pop to start day!
Entry: We are looking to get involved at 13.55 – 13.75.
Exit: We are looking to cover after a 2-3% drop.
Stop Buy: 3% on top.
Good Investing,
David Ristau
