Hi Duke,
You make a good point that I myself have noticed as well. It does seem that on many occasions, SNRS has a bit of a negative correlation with some of the other broad market indices, like today, for example.
That's fine.
But over the course of a couple months(not one day), which is the period of performance I was referring to, the relative performance of SNRS to the S&P500 has provided indications that some deterioration has occurred--enough that the odds for greater near-term gains appear to have diminished.
I like to use the analogy of blackjack when using technical analysis. When the odds are stacked in your favor, by all means, load up on the chips, but once you've played enough Kings, Queens, Jacks, and Aces, your odds for hitting a blackjack are much lower, and therefore warrant a lighter bet until the cycle starts all over again.
You're proficient enough at the art to see what I'm referring to: the intermediate term trend has broken, momentum has slackened, distribution has persisted, the price sold off at the appropriate points of resistance, and it persists below some key moving averages. It has been my experience that it has tended to be more imprudent to be overweighted in particular holdings when the technical strength diminishes to the current extent that this stock has experienced.
It doesn't take too much to change that picture, but for as long as it exhibits these characteristics, I don't advocate a full 100% position.
Regards,
Rainier |
