>>I am short AOL and very relaxed about it. Shorted at 74+.
I am short AOL at 74 and I am holding because I know it is a matter of time and I have the time.
Had shorted ASND in the 50's held it through 80 and covered when it hit 38 in March (had to hold about 6-7 months), usually when there are enough oustanding shares there is no problem, had shorted ASND based on fundamentals and I had an inkling that it would take time.
One mistake I did with ASND was that I should have shorted it at 80 again which I did not do, I will try to avoid it this time around.
With stocks I either use a long term or short term approach.
My short term trades are based on TA and my long term trades are based on FA.
The best ones are where TA supports FA (like GTW now, yee haw! I shorted it on every bounce and predictably made money).
For those based on TA if the trade goes against, then I take losses quickly whereas with FA I always hold until it reaches my target.
Many investors get jittery when the trade goes against them when they use/have-used-in-the-past the wrong combination, that is either short based on TA and not get out soon enough or short based on FA and take quick loss.
AOL, CTXS, YHOO, et al are difficult to justify fundamentally and should be shorted on that basis rather than TA, on a technical basis YHOO may be a long at this time.
Even if TA is used in conjunction with FA to get an entry point for a trade the underlying basis for holding the position should not be forgotten.
I have seen professional shorts holding their positions for real long times (heard IOM shorted into 30's held through 55 last year and covered on the drop, also heard about Pressteck shorted at 80-85, held through 200 and covered in the 40's).
I agree with you Pancho that options are expensive and increase anxiety as does using a lot of margin, I opened an options account recently and have been playing a little bit (unfortunately ;-) all my option trades have been winners, some losses there would summarily have discouraged me from options as intuition based stock trading did to me when I started in the beginning a bunch of years back).
I also think that this market is losing rationality rapidly and we know what that means is lurking at the end of the tunnel. |
