Random Thoughts: Trading Around the RIMM
BlackBerry maker offered a tough lesson on Turnaround Tuesday.
Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Aspire to Inspire.
The Good, The Bad and The Emmy - 9:46 am
Greetings from the Emmy Award Winning MVHQ where we're doing our very best to focus on the task at hand while enjoying the journey with Hoofy and Boo. I'll again offer a heartfelt THANK YOU for both the unbelievable and unwavering support while at the same time understanding the extraneous demands this week, between yesterday's event and tomorrow's sold out Festivus. We promise to do our very best at delivering the type of insight and acumen you've come to expect in the 'Ville, particularly as many Professors are already on their way to Gotham.
While I was away from the fry for the better part of the day yesterday, the Turnaround Tuesday phenomena again played out. It's uncanny, isn't it? Almost like you can set your watch to the second session of the week serving as a reversal day. I, of course, got the double secret wishbone on my positioning from Monday, where I sold my pure market risk and kept my exposure in Research in Motion (RIMM) and Amazon (AMZN).
As a human being, I'm prone to errors in judgment and mistakes along the way. When I slapped on the RIMM, I set a "mental stop" below the previous low and saw, with both eyes, the technical importance of RIMM $40. In yesterday's excitement, I failed to follow the discipline that has served me in such good stead and instead held my positions. The Trading Gods didn't like that, of course, and taught me a lesson when RIMM messed the bed and blew the quarter.
Click to enlarge
How much of that was or is "in" the stock remains to be seen but I share this with hopes that my mistake can be your lesson. Risk management is a twenty-four hour, seven day a week proposition and one small misstep--one little stumble, no matter the reason and regardless the excuse--is all it takes before a deposit in the bank of humility is required.
I'm sitting tight, for the time being, in part due to the size of my risk and my sense on the tape (I also wanna see the reaction to news). There's no crying in baseball and no hiding in the 'Ville, however, so I'll raise my hand, say mea culpa, poke myself in the forearm with a pencil and promise to make it right over the course of time.
Thanks Minyans (again and again and again) and have a heckuva happy Hump.
The Hop, Skip, Jump and Hump - 10:32 am
The juggle continues as Pep sneaks out to do some media--trollop!--and shape plans in front of tomorrow's (gulp) oversold Festivus. Enough about all that jazz--ticks are flickering and critters are bickering as we shape the tape and look to escape to the land of profitability (financial and otherwise). Some top-line vibes:
Out of the blue and into the black, they give you this and you pay for that. The former is being addressed by Amazon (AMZN), which has sprinted 7% higher. It's not a huge win versus my entry levels but I'll most certainly take it.
The aforementioned "that," natch, is Research in Motion (RIMM), where I'm sizing up corks for my forks by nibbling anew near the $35 level. It could be good money after bad but a retest of the $40 breakdown level wouldn't shock me and I want some cheap inventory to parcel out if and when. And yes, I'll set a stop on that additional exposure below the daily lows.
Stumble, but don't fall, whether it's a diet or a trading position.
This may very well be "TMI" but my previous weekend pimple (at 39!)--which I named Emmy--has left (actually, she's transformed into a beautiful golden statue holding a globe). Now? I've got "Oscar" inside my nose, just in time for our massive shindig tomorrow. Wait--am I saying this out loud? Damn literary turrets.
The rest of the banks and brokers are flipping the upside switch. As go the piggies, so goes the poke. Keep 'em on ye radar, yo, and keep that head held high.
As always, I hope this finds you well.
Please be advised that the 2008 Holiday Festivus to benefit the Ruby Peck Foundation for Children's Education has officially SOLD OUT as we tagged our magical 300 Minyan mark. If you (or someone you know) would still like to attend, shoot us an e-mail and we'll see what we can do. We strive to take care of our own in these parts and as always, we'll do our best to circle ye faithful.
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 firstname.lastname@example.org.
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