Going LONG or SHORT in Rail Companies? Series I: CSX

I will be writing another series on Long & Short Investment covering Rail companies.  Generally, there could be some sell-off occurring in these Rail companies.  If we add these Rail companies to our portfolio at a right time, we could make some profit from

MOO at 61.8% Fibonacci Retracement Level

I have posted my recommendation on shorting several stocks in the past (GOOG, LUV, ASH, DTG, XOM) on Long & Short Investment. Today, I will be looking at another short potential on an ETF. Looking at a two year chart on MOO ETF, we see that this agricultural business ETF more than doubled from its low of $20 per share around November 2008. It has now retraced back to

GOOGLE: Is It Time to Go LONG?

Previously on Long and Short Investment, there was an article on how we should be SHORTING GOOG with a tight stop when it was slightly above $625. We came to this decision by using a fundamental and technical analysis on the GOOG stock. Since

Baidu At Decision Point... Up or Down?

Recently, we covered US Internet search provider, Google, by using fundamental analysis and technical analysis on Long & Short Investment. I thought it would be a fit to examine Internet search provider from China using the same fundamental analysis

A Turning Point for XOM Exxon Mobil

Last December 2009, I recommended three stocks for possible SHORT Trades on Long & Short Investment: BEN (Franklin Resources), DTG (Dollar Thrifty Automotive Group), and ASH (Ashland). I still recommend holding onto these three stocks as SHORT positions and along with them, I would like to consider adding Exxon Mobil.

How Would You Trade GOOG to Lock in Profit?

I am constantly trying to come up with good ideas to trade stocks to lock in profit and I try my best to share my ideas on Long and Short Investment. I would love to hear your opinion on my recommendations, whether it is good or bad move.

AAPL Making a Move But Which Direction?

Look at past three months of trading for AAPL. Do you notice something?  AAPL has clearly made a double top near $205-$210 price range and has been consolidating since then, making a tight triangle pattern.

BEN @ Critical Junction

Similar to DTG that I posted last week, BEN also provides a great opportunity to make some profit.  BEN has gone up significantly from low of $40 in 2009 to high of $116.  Ben went up too high too fast.  Logically, we need to be SHORTING BEN.  But, let’s see what the technical analysis has to say about BEN.

Golden Opportunity for Bears: Is It a Perfect Time To Short DTG?

Check out the year-to-date chart for the Dollar Thrifty Automotive Group (DTG).  It is currently trading around $24-$25 range from its low of $0.60 on March 3, 2009. 

GOOG at $600 Resistance Level

After losing 50% in 2008, Google has performed really well in 2009. It has regained most of its loss from 2008 and currently is at a critical point at $600. $600 is a resistance level going back to mid-2008, the last time GOOG was trading at this level. One thing to note is that GOOG has been trading up in 2009 with decreasing volume and the volume has been declining even more since October. Also, keep in mind that those who own GOOG will start taking profits at this level. There is a good chance that GOOG has reached its peak short term and will head lower from $600. But, be careful because if S&P500 breaks its 50% retracement level at $1120, then GOOG will continue its upward movement along with the stock market. At this level, I would take the risk and SHORT GOOG with a tight stop-loss.







UPDATE on 12/24/09:
It looks like GOOG has cleanly broken its 50% retracement level.  I took the risk and shorted GOOG but fortunately my stop was very tight so I did not lose too much money.  Although GOOG could continue to go up from here, I am expecting it to eventually retrace back to $600 again to test now the support line.  Good luck everyone.


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SHORT Opportunity: GS, ASH, LUV

Today, I would like to discuss three stocks (c) that have a high SHORT opportunity.

Goldman Sachs Group company (GS) recently crossed $166 level and it looks like it will be bearish as we move into 2010. GS is a good candidate for Short as it will continue to go down from currently trading level at $164.

Ashland (ASH) is another stock that is a good candidate for Short. At current price of $39-$40 level, it is really a good opportunity to enter Short position. Expect ASH to reach around $20 level by mid 2010

Lastly, Southwest Airline (LUV) is positioning itself for another decline. Check out the last 10 year chart on LUV. As you can see clearly that $11 has been the support for many years and this year $11 is the resistance. Now that LUV has reached $11 with lower volume from its low of $5 this year, this is a great opportunity for SHORT at current price.

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Technical Analysis: GOLD and S&P500

What Technical Analysis is Telling Us - XLF

Let’s take a look at XLF – Financial AMEX Sector SPDR. If you look at the past 6 months history, it is clear that the support area is at the $14.00 area, which is also the 38.3% Fibonacci retracement from the July lows. You can also extract the Head and Shoulders forming. The head is in the October month with left shoulder in September and right should in November going into December. There are also negative momentum and negative volume forming starting from August. A clean break below $14.00 or $13.75 would be a major sell signal so follow this stock closely.

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What is an Inverse ETF?

An inverse Exchange Traded Fund (ETF) is also much like a mutual fund consisting of a group of stocks. However, an inverse ETF consists of a group of stocks that takes opportunity to make a profit when the price of stock market falls. It follows the inverse of the stock market. If you believe the market overall will fall, you can actually add these inverse ETFs into your portfolio. This strategy is very similar to shorting stocks but without using a margin account. We all know that when you want to short a stock, your brokerage account must be converted to a margin account. Otherwise, you cannot short any stocks.

I advise investors not to get into inverse ETFs as a long-term investment because the market cannot go down for a very long time and it goes against the history of the stock market. There will be ups and downs but overall, the market tends to go upward direction. Inverse ETFs are attractive when there is a downturn in the stock market to minimize the losses.

Here are three inverse ETFs:

1. SRS - ProShares UltraShort Real Estate

The Fund seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Real Estate Index.

2. FAZ - Direxion Daily Financial Bear 3X Shrs

The Fund seeks daily investment results of 300% of the inverse (or opposite) of the price performance of the Financial Index. The Fund seeks to create short positions by investing at least 80% of its net assets in Financial Instruments that provide leveraged and unleveraged exposure to the Financial Index.

3. ERY - Direxion Daily Energy Bear 3X Shrs

The Fund seeks daily investment results of 300% of the inverse (or opposite) of the price performance of the Energy Index. The Fund seeks to creates short positions by investing at least 80% of its net assets in Financial Instruments that provide leveraged and unleveraged exposure to the Energy Index.