Wednesday, September 05, 2007
Shorts, and Possible Breakouts
I'm shorting Titanium Metals (TIE) on the basis of it tagging it's 50SMA (simple moving average). The stock itself has been weak, relatively dampened volume, and it crept up right to it's 50SMA to the penny. My observations are that it will decline from here on weakness. I'm buying the September $30 Put Options for $0.35 cents per contract.
Baidu.com (BIDU), one of the tech power-house stocks that is up there with Google, Apple, and Research in Motion (RIMM). This stock has been on a roll lately ramping up nice percentage gains and today it popped right up and tested it's resistance level of $219.25. It briefly touched $219.90 before coming back down to earth, but the volume was above normal which is a good sign of buyers in the market and it could quite possibly break-out to new levels. This is one I would definitely be watching for a false breakout, and/or test of resistance, or a full fledged breakout to new highs since the tech sector has been on fire.
I'm also shorting OGE Energy Corp.(OGE) as it tagged it's 50SMA and has been very weak as of late. The volume was sub-par which tells me this run won't last, the buyers aren't there, and it's going to fall, TIMBER!! I'm shorting the stock outright vs. buying PUT Options. The Open Interest for the September $30 Put Option is "11 contracts", wow talk about lack of liquidity.