Yesterday I shorted PAY, and I lucked in to a great profit today. I had no idea earnings were coming out (I’m a chartist, after all; I don’t track such things). I looked at the chart and thought, “where there’s smoke, there’s fire”, and after the huge gap-downs, I figured the recovery PAY had seen would soon be reversed. Little did I know it would come so swiftly.
This reinforces for me what has been a recent lesson: don’t fear taking a position just because you think you’ve “missed the move.” This applies to long as well as short positions. In the case of PAY, it looked vulnerable to a sell-off, even though it had already peaked over two years ago. Today’s 20% drop illustrates that such selling can simply continue.
Want an example of a stock in a similar situation? Here you go:
As far as tomorrow goes……..I’ve said my piece: I think we’re going to hit 1575 this month (plus or minus a few points). The monster reversal rally today sucked for me, eating up about 75% of my wonderful profits from yesterday, but the reason I’m spread out among so many positions is so I don’t flit in and out capriciously. I am positioned for a drop, and I’m sticking with it until we meet my target.
Buying into these rips recently has always ended in tears for the bulls:
I’m done for the day; fare thee well!
