Trading Places: Research In Motion and Facebook

By Todd Harrison  JAN 31, 2013 11:27 AM

Crossed swords in the city of bulls and bears.

 


Editor's Note: Todd posts his vibes in real time each day on our Buzz & Banter.

I had a business breakfast this morning -- since I'm juicing, my "breakfast" was two cups of coffee -- and while it was one of the better meetings I've had in a long time, it was a costly klatch from a trading perspective.

As discussed in detail the last few days, I entered yesterday’s Facebook (NASDAQ:FB) earnings on the short side of the stock (playing the downside with a $28 trading price target) and we flagged Research In Motion (NASDAQ:RIMM) $12 as meaningful support -- a 50% Fibonacci retracement of the recent rally -- after warning of a "sell the news" reaction on Monday.

True to the path of maximum frustration, Facebook traded to $28.80 this morning and RIMM, not to be outdone, slipped to $12.15 before I could get to my turret (to cover the partial exposure on the former and initiate a long position on the latter).

What did I do? You mean, other than give my coffee cup a dirty look?

I bought a partial position in RIMM at $12.93 (with the hope that I can add to it closer to $12) and I've yet to punt any of my Facebook puts as the stock rallied more than a dollar as I was writing my first Buzz post today.  Fifteen minutes earlier, I would be having a pretty profitable morning.  Now, I’m fighting the good fight (which will be updated in real-time on the Buzz).


 
Am I complaining? Nope -- I learned a long time ago to never complain when your P&L is green, as that's the fastest way to morph it into a creepy shade of crimson.  So let me be clear to the trading gods who wander the markets, whispering to “stay humble or I’ll do it for you” -- we’re on the same page and I am not complaining.

Away from stock-specific situations, market breadth is flat, gold is again lower (after yesterday's hot-popper) and sitting on the 200-day moving average (1663), the banks are pretty in pink with the exception of Deutsche Bank (NYSE:DB), which is up smartly on earnings (after holding the $47 level we fingered last week) and the pain in Spain is raining pain to the tune of a deuce (2%).

In other news, some of the cannabis stocks I own (that I can't mention by name but you know the industry) continue to ramp higher, and I'm layering out of most of my exposure before those profits go up in smoke.  Just trading, and no, I'm definitely not syncing my time horizon with my risk profile!

Random Thoughts:
Full disclosure: Minyanville has a corporate relationship with RIMM.

R.P.

Twitter: @todd_harrison

Position in RIMM, FB.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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