Time to Take Some Profits and Cover Some Shorts

I put out short position reccommendations the nights of June 21st, June 23rd and June 28th. Since then the market has dropped steeply and these shorts have worked out very nicely and are all profitable.

 

A summary of the short recomendations;

Day Short Recommended		Stock			Next Open			Last Close			Return in %
June 21st		BXP			$79.72			$71.34			10.51
		AVB			$103.40			$93.37			9.70
		BBY			$37.02			$33.86			8.34
		GPS			$20.97			$20.97			7.20
		PEG			$33.05			$31.33			5.20
		SRE			$49.20			$49.20			4.90
June 23rd		WHR			$96.95			$87.82			9.42
		SWK			$52.04			$52.04			2.92
		JBHT			$33.25			$32.67			1.74
June 28th		NOC			$57.60			$54.44			5.49
		LMT			$77.08			$74.50			3.35
		PCP			$104.86			$102.92			1.85

 

After a two day drop of the Dow Jones Industrial Average of 365 points I recommend taking some profits here and covering some of your positions.

I would cover the full short positions in BXP, BBY, SWK and GPS immediately on the open of July 1st.

AVB could fall another few points but cover 1/2 to 2/3 of your position and stop out the rest at $97.50.

PEG and SRE have room to drop but stop out your position at $32.06 (PEG) and $47.50 (SRE). Cover part and stop out the rest if you wish to take profits.

WHR could easily fall to its 200 day EMA of $83.50 but after making over 9% in a few days I would advise taking 1/2 of your position off the table. Stop whatever position you leave on at $90.26.

JBHT still looks weak and could drop below $32 easily but the stock could also rise on a recovering market. Place your protective buy stop at $33.20.

I see NOC dropping to $53. Move your protective buy stop to $55.76 and let this one ride.

LMT is very weak and could drop substantially from here. Place your protective buy stop at $75.76.

PCP gapped down on the open the day after my short recommendation was given which only has provided for a 1.85% profit. The stock is sitting on top support at $103 but if it should break lower could easily drop below $100. Take half your position off on the open on the 1st to guard against a market retracement after 300+ points of drop. Stop the rest out at $104.75 in order to not turn a winner into a loser.

Hopefully you have been following my picks - the market is down 6.4% since my first six short ideas (+7.67%) while all twelve short ideas have an average positive return of 5.9%. 6.4 + 5.9 = 12.3% of market outperformance. Not bad for seven trading days of work. You could get a better job - you could marry Tiger Woods. :)

The reason hedge funds almost always outperform the market is that they are quick and nimble and play the short side of the market. If you are a long only investor in today's market, I am fairly certain I can beat your returns on a daily, monthly or yearly basis. Don't play just one side of the market - people get taken out feet first that way.