“Repeat performance”
Intraday Investments Trading Summary for Thursday, July 26, 2001
Today ended up being much of a repeat performance from what we witnessed in yesterday’s trading—breakout rally early in the session, selling to below support, and an afternoon recovery to the highs of the session. The only difference is that today’s afternoon rally blasted through the highs of the morning session and continued to rally right up until the close.
Early in the session, we went long some stocks in the Networking sector that were showing relative strength. However, we were forced to close those positions for small profits when the Nasdaq reversed and broke below support in the late morning. Even though our morning profits were very small, we felt good about the fact that we managed the trades well and prevented major losses when the reversal happened.
In the afternoon, we spotted strength once again in the Networkers and Semis, but were not comfortable entering any new long positions until the Nasdaq broke above the morning high. After it broke above the high, the rally was so strong that there were really not many opportunities for getting low risk/high reward long entries. As such, we missed out on a great portion of the afternoon rally, but we did so at the benefit of having minimal risk. As our trader-members will be quick to point out, we strive to hit singles every day, along with doubles, triples, and the occasional homerun. But the consistency of hitting singles every day is what we strive for, and today was just another day of hitting a single. Remember that hitting singles every day results in a very profitable year and capital preservation should ALWAYS be your number one priority.
The most exciting thing that happened today was that TARO dropped nearly 6 points, which caused the premium of our calls to drop by more than 3 points. We are still short the calls and expect the pace of the premium erosion to increase now that the calls are out of the money. In addition, our JWN short calls are also working well for us and lost 60 cents in premium today.
We made the following round-trip intraday trades: JNPR long + 0.36 (two entries), AMAT long + 0.31, IWOV short + 0.07, CIEN long + 0.06, FLEX long (0.30), and JDSU long (0.17). We closed the following positions from overnight: VRSN long + 0.61, SUNW long + 0.62, VRTS long + 0.48 (ugh! sold in the morning before the Nasdaq reversed back up and VRTS took off).
We initiated new overnight trades in MXIM and AFL (both short). We also still have the following swing positions: short TARO Aug. 90 calls, short KKD, and short JWN Aug. 20 calls.
Trade Well!
Deron, Steve, and Ed
General Partners
intradayinvestments.com
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