I am a little bit worried about this quick runup in Zoltek (okay, as a long, actually I'm elated, but just listen...).
I am a Cabot subscriber, and am familiar with the way in which Cabot picks can shoot up to the moon and then come crashing down. I held Presstek from about 70, and watched it ride to 200, and then settle down to around 80 (35 to 100 to 40, post split).
When Presstek underwent that meteroic rise, gaining $5 one day, $6 another, etc., it eventually slowed down and then stopped at $200. It hung out there for a few days, declining a bit each day, displaying a clear lack of strength at that price. Then very quickly, the bears came in and slammed it down, way down.
Zoltek's recent rapid rise reminds me a lot of Presstek's.
I saw Presstek's weak chart formation at the peak, but I didn't act upon it. I was planning to hold the stock for the long term, but sometimes when a chart looks bad, it's not a bad idea to act up it. In hindsight, I wish I'd bought some out of the money puts, say at the 175 level, to protect a portion of my profits.
So my question is, is there anybody out there who is holding Zoltek for the long term, but has a strategy for locking in these new profits to protect against the anti-Cabot bears? Would you use purchase puts? How will you decide when it's time to do it?
- DJ |
