Sold "Short" Brookfield Asset Management (BAM-a.TO or BAM:US)
If you read my blog you probably know that I don’t usually short stocks but this one was too appealing given it’s recent crazy ride (cough! cough! short covering) but I think enough is enough…. Note that I’m looking at this as a short-term trade… that’s all.
Reasons I’m shorting it:
- The stock has been running crazy since $28 dollars and is now sitting at $35, that’s a fancy 25%…
- Stocks tend to revisit the 200sma which is sitting at just below $34 right now (see #2)
- The volume was strong yesterday as shorts didn’t think it would go above the 200dma it did…
- Let’s say you’re holding this stock since $28, what would you do today? I’d be locking my profits, are you kidding me? 25%?
I’m hoping to capitalize on a pullback to the $34 area, that’s all… Here’s my entry summary:
Entry at $35.00, Stop $ 36.50, Target $33.80. Good?
May 16th, 2008 at 12:05 pm
Hi there,
I took the long entry on BAM back after the recommendation, waited for a bit more conformation, but got in at a good price. I set a trailing stop loss around $34 whne it hit $35, so I’m still in it.
The key formation at this price level imo is bullish looking. Note also its intraday spike up to $36.70 in my market maker data (maybe someone read your short stop price to trigger it)! jokes.
As a bit of a higher risk trade and ignoring your now short sell recommendation i’ve pyramided my quantity, and set a close stop at 35.64 , to lock in profits on the original long, and if there is further upside aim for a big gain. (only rsiking 20c on the pyramid entry so the quantity is much larger).
Have you any more thoughts on this stock chart? I havent seen your close out comment on it, unless I missed it.
Best regards
Pete (often long gold and shorting the USD).
May 16th, 2008 at 3:49 pm
Peter, I apologize for the missing post on BAM, please see my last weekly trading summary. I’ve been having problems with WP and WLW since the latest upgrade, not fun…
I think you’ve done the right thing on BAM, the stock is overbought it will likely consolidate over the next little while… it should offer a good entry once it’s back inside the bands. See here:
http://www.tradeforgain.com/trades/trading-summary-for-the-week-of-05162008/