It's been a pretty good morning for me so far, all things considered, but I want to point out a complete failure of one of my few longs: INFN.
This poor sucker lost one-third of its market value this morning. It's particularly troubling for me since it was a real favorite of mine, as I mentioned a few weeks ago.
Now, I will never miss an opportunity to tell myself I'm an idiot, but it doesn't apply this time. Why? Because:
(1) The technical basis for my long suggestion was sound;
(2) I used good risk management, allocating the smallest allocation that I permit in my portfolio – $25,000 – to this position. I put on a small position because my stop-loss level was 10% away from the entry, which is, in my trading, extremely high (I prefer about 4% or less).
So INFN gave me a loss this morning – indeed, it took my profits from OIH, which was a dozen times larger in size, to null out this loss. But as long as I am obeying my own rules, I am willing to live with the occasional "shock" like INFN, since it doesn't cause any lasting damage.
