The news provides an easy day for media since it makes for easy programming, a snow day for journalists. No one commented that every single analyst is negative, not one person said that HPQ has a chance, that is a boat fully loaded to one side. Meg is likely also wanting to hammer the stock hard to ring out all the negativity so a year from now the earnings will have an easier time of beating. Also, the huge billion dollar numbers and alleged fraud may lead to some recovery in the future. One analyst said it does not matter if a few billion does come HPQ's way down the road. That comment obviously relects an analyst that is pumping the negative side since his firm is likely heavily-short HPQ. The huge write-off will allow HPQ to pay lower taxes moving forward. No doubt the news is surprising, and there may be further fall-out, so the play remains speculative as it was before the news.
Despite the 12% drop, now down 9% on the week, the charts remain positively diverged. The falling wedge and oversold conditions further reinforce a basing for price moving forward. Note the capitulative selling in October, and futher capitulative selling yesterday, even the die-hard long holders said "Get me the H*ll out!" From 50 to 11 is one heck of a drop. Even from 15 in early October to 11 now is a big drop. Keystone had started nibbling over the last couple weeks and bot more HPQ yesterday. It is a dangerous speculative trade and will be a wild ride forward. Projection is a basing now and recovery as the weeks play out. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
KS, I noticed that you took a 10% gain out of ZNGA, popping around $2 to $2.20, then you were out.
ReplyDeleteYou make a big deal about HPQ dropping from $48 to $11, but are you likely to exit this long after $1 in gains, OR, will you try to ride it up to something meaningful like $20-25?
Anon, no, most definitely exit as soon as reasonable profit appears, if it does, and rotate the money inot the next trade on something else. Most of the trades here, nearly all of them, are intended to be short term. A lot of it is speculation trying to call tops and bottoms. Sometimes a reentry can be done after the intial pop, and then ride the second run and exit. But from a long term perspective, both HPQ and BBY are likely okay moving forward for the weeks and months to come. In a large market down move in the coming weeks, these stocks, DELL, HPQ, BBY, AMD, MRVL, INTC, etc.., may hold up a bit better since they are all beaten up already, but, as always, sometimes they go lower. But all those tickers are likely good long term plays.
ReplyDeleteIn general if you look back at most of the stocks where the bottoms are called here in real-time, they will bounce and the trades will be forgotten but if you look back they all have more sustainable moves higher for those that are patient.
Thanks, KS!
ReplyDeleteI have noticed that your Keybot the Quant can stay in a position for weeks and even months at a time.
I think it would be useful if you could consider a list of stock holdings (either long or short positions) that have the potential to profit in the weeks and months type of time frame.
thanks!
Yep, Keybot can remain on one side for a long time if the markets are trending. It is flipping sides this year more often since the markets are sideways and treacherous and the central bankers and politicians are causing turmoil.
ReplyDeleteAlthough the trades are short term here, take the money and run, all of them should continue their trends since tops and bottoms are called and once they occur it is a major trend change. So most of the trades have life in the same direction either long or short, to squeeze out more juice over time, but Keystone is a shorter term trader so it is more fun to simply move on and look for another top or bottom in something else.
So the Positions and Picks page posts all the current ideas ongoing. so all of them serve as longer term trades once they base out. At the bottom of that page are the macro concepts that may interest you. Lots of tickers there are very attractive long term invetments but as always in trading, it all matters as to where the entries and exits are made. For instance, ARMH, with the mobile chips, is very attractive long term, but everyone and his bro ran to it already. It would be nice to see a major market sell off since ARMH would be one to consider snagging and then sitting on it for the next two or three years.
For the entire portfolio, Keybot controls 65% and takes the calmer, more smooth approach through the year. Keystone's trading is the other 35% which is the higher risk speculative style trading. So you can choose your poison. Slow and steady investors that do not have the time or desire to mess around with day trading or ST trading can follow Keybot. Those that want the high risk-high reward plays, but the ones that can smack you as well, can follow Keystone's trials and tribulations.
ReplyDeleteThanks, KS! I will start paying more attention to your Positions and Picks page.
ReplyDeleteAnd, your ARMH comments are greatly appreciated!!
What do you think of JCP? Is it another Gimbels Dept. store, or a General Growth Properties? !!
JCP is even too risky for Keystone to consider. Best to stay away from that one, it is a disaster, the guy from Apple is trying to adopt similar ideas there, but he sold gadgets at Apple, not socks. Retail is one sector where you must respect the opinions and guidance from experts and knowledgeable people with years of experience, otherwise, it will eat you alive. JCP is paving a new direction learning on the job, getting eaten right now. Best of luck to them but probably best to stay away. Maybe give JCP a couple months and see how it is going.
ReplyDelete