Investment Capitalist

SLM: Sallie’s showing great bid support after a 4-point run from where the entry was. It’s probably tempting to sell for $19 something you just bought for $15 about ten days ago. I know, “compound it out and that’s a fortune”. The problem is that it hasn’t been a year and this is a volatile market. Assume you picked up a line around $15.50 avg. and the size is 25,000. Regardless of the size of your total trading line, when your position runs almost four points in a week, selling around 5,000 shares in the $19 range and then adding another 7,500 shares around $18 gives you the benefit of allowing more flexible ranges as the position evolves. Trade around the core.

HOC: Been a great trading stock for long-term, multi-month moves. The correction which started last July appears complete. As the macro factors dominate the long term trend in the energy complex, short term factors such as external liquidity events (e.g. Bear Stearns) will dominate the near term volatility. Look for a contraction in the short term volatility to indicate a resumption of the long-term trend. Then a little technical analysis for timing your position development: subjective technical analysis (i.e. non evidence based) is hot air. Holly Corp’s stock isn’t though. An initial approach here in the $47 range is protected somewhat from too much further downside.

Several names have experienced ginormous moves since the bloody end of March, so if some of you traders over-extended in terms of your position size, throw out a few sell orders on a ladder and let them work for you at various price and size levels. This will prevent the position from triggering risk flags as the dollar gains push the position beyond your limits. Trade around your core. If your execution costs are preventing you from working your positions appropriately, it’s time to shop for a better rate. Drop me an email and I can make some recommendations privately.

Chinese energy stocks have been looking very sick lately. Are they signaling possible trouble ahead in the energy complex? Or is this another signal all together? The other scenario would be a possible spike in oil prices and the Chinese are massive importers with very few consolidated energy companies in the spirit of Exxon and Shell. Hmm…

Oh and if you’ve been wondering why the titles of my blog posts have been strangely referring to a specific number of stock recommendations which usually never correlate with the actual number of recommendations, there’s a perfectly reasonable explanation and it’s not the ADD. It’s a little experiment to see how search engines and blog aggregators pick up the posts, and the effects the titles may (or may not) have on the total traffic that each post generates.

Disclosures: none