Wednesday, April 1, 2009


I put in a limit order to buy at $15.38

The market is "melting up" whatever that means, and I am predominantly short. Rather than sell of my shorts, I'm going to try my hand at hedging. The idea is to buy longs to offset the loss in shorts. Sell the longs when things turns around and watch the shorts go green again.

I'm now using and it is awesome.

Here's why I picked ATHR and why I picked 15.38 as a price:

I wanted a stock that would go up in this melt up/short squeeze. ATHR has over 10% of it's float as short. That's significant. It is also a high beta stock so it should be a little more volatile. It has been gaining momentum and the sector is relatively strong. The recent PPT upgrade is the final nail.

With regards to technicals, I looked at it over various time frames. The long term charts look good and it looks like it's coming off a bottom with an upward moving 5MA that just busted through the 20MA. After the run up this morning I wanted to wait for it to come back to the VWAP before getting long again. This should save me 40 cents from when I originally wanted to buy the stock. The order I put in is just below/on the VWAP.

This is the first time I have used a 5 minute chart to really time an entry based on a lot of indicators. It sounds stupid but I feel really good about this and hopefully things continue to run up, if not I'll cut the stock at 15.28

300*(0.10)=30 as maximum loss. I think this could really run up to 19 or so on a sustained run so I might even dip in a little extra early incase my order is too low. I don't usually use limit orders.

UPDATE: I'm going to cancel the order if the S&P fails to hold 804.

UPDATE II: Didn't dip low enough, missed my entry. Oh well, plenty of other opportunities.

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