A Portfolio Update: Too Much, too Soon
To make money in a churning, you need to have firm discipline when it comes time to buy and sell. If you're watching a stock make a solid upward move, then it often pays to wait out the mini-rally, finding a more compelling entry point for that holding.
have spiked roughly 10% since then (congratulations if you bought when I wrote about the stock), and I prefer to wait and see if this stock comes back to the levels seen last week. It may never come back to those levels, and as a result, it's possible that I may not buy this stock at any point. (Recall that I wait two trading days after an investment idea is presented before looking to acquire for my $100,000 portfolio.)
It's unclear why shares are moving so briskly. Perhaps it's because investors sense that the company will release solid fourth-quarter results in about a month from now. Perhaps it's because this stock is heavily-shorted (with the short position equivalent to 11 days' trading ), and short-sellers are covering some of that position in the face of the stock's .
Action to Take --> Regardless, I continue to think of Zoltek as a solid investment, but a questionable trade. Sharp upward moves have a way of reversing as momentum investors exit a stock just as fast as they entered it. In the interim, I will be delivering additional investment ideas in coming days. Make sure you don't miss a thing by signing up to have these articles sent straight to your inbox as soon as they're published. Click here to sign up.
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StreetAuthority LLC does not hold positions in any securities mentioned in this article.