CCJ (Cameco Corp)

Cameco is a miner of uranium and has a strong history of increasing profit. The stock has risen from below 10 to over 40 over the last 2 years, but has backed off since spring of 06. While profitability continues to rise, it appears that the stock has gotten a bit ahead of itself trading at 60 times past earnings. Now the expectations for 07 are $1.61 per share which puts the stock at a much more reasonable valuation but forward projections are never extremely accurate.

The stock has run into resistance and sold off sharply late last year. This sell off probably drew in some of the more aggressive short sellers and then the November and December rallies probably stopped them out and gave the bulls new hope. Now the stock is turning back and selling below the most recent consolidation on strong volume. I expect that this will begin to concern the bulls and we will see a steady liquidation for the next few months. If the overall market gets much more weakness it could add to the move making the stock trade down more quickly.

At any rate, I am shorting 9,000 shares or taking a 3% position. I got the stock sold at 37.27 and will use my standard 10% stop level for the time being.

GYMB (Gymboree Corp)

Gymboree has had an incredible run over the last year rising from $12 to over 45 in a relatively short amount of time. The stock is not extremely expensive, but the reason for this is the fear that the fundamental growth could be slowing and so the stock will demand a smaller multiple.

Thursday, the company released their January sales and it was a dissapointment to investors. The stock sold off hard on the news breaching the 200 day average. The stock continued to trade lower yesterday as the overall market experienced weakness.

Looking at the technical picture, the stock hit a highe back in November but this was after a summer base that didn't shape up as well as one might have liked. The stock gapped out of the base without rounding out the right side which could be indicative of climactic buying when the last holdouts pour into the stock and then there are very few investors left to continue to support the stock.

For whatever reason, The overall market picture and the individual signs look a bit negative and I am looking for places to put short exposure on to offset my risk with the long names I am holding onto. So I shorted 9,000 shares at 36.63 to initiate a short position.

MR (Mindray Medical Intl)

Mindray had a successful IPO in September of last year. It priced at 14 but has never traded below $15. Its initial run lasted 3 full months taking it above $27. Since that time the stock has pulled back to consolidate and the company has filed a shelf to offer more stock. The deal should price this week and yet the stock is running up into the deal. This is indicative of pent up demand and is a very good opportunity with lower risk.

Yesterday (29th) i bought 5,000 shares which is about a 1.5% position (i am initiating my positions on the smaller side right now because i am less comfortable with overall market conditions.) I expect a nice run after the deal is complete and will hold as long as the price and volume trends are constructive.

Feb 10, 2007

I was very impressed that while the overall market was having a rough day yesterday, MR traded strongly with volume coming in above average. That follows 2 days of consolidation in weak volume which is a great pattern. I have additional capital to manage and am looking for opportunistic places to put that to work so I increased (doubled) the size of the position buying an additional 5,000 shares at $25.86. I look forward to seeing if the stock can break to a new high as IPO's and secondaries are working well as a general rule.

NYX (NYSE Group)

NYSE is a very old name but has a new face. After merging with Archapelago last spring the stock was listed under the ticker NYX. The company has finally begun to embrace technology more aggressively and has been able to operate much more profitably over the past 3 quarters.

The stock shot out of a well formed base in November running quickly from 80 to 110 in a few short weeks. The industry is very attractive with corporate activity picking up and a profitable environment. After its run the stock pulled back to the 50 day which often acts as a support level. Friday's action had the stock breaking back above 100 in the highest trading volume in months. I picked up a 3% position on this buying frenzy and expect follow through very quickly.

The stock is not cheap even though earnings are supposed to be 45% higher in 2007. However, the company is in the middle of much change so it is hard for analysts to get accurate expectations. The market is obviously pricing in positive earnings surprises which could drive the stock even higher but adds a degree of risk to the equation. I would be willing to sell calls from time to time to hedge my risk to a sharp pullback. One thing that helps is that the call premium is typically attractive in this name.

Feb 2, 2007

It must have slipped my mind but i wanted to post it late rather than never... Last week as I was becoming a bit concerned about the market, I decided to hedge exposure in some names. NYX was one of them and while the stock wast trading right at 100, I sold the Feb 100 calls for $4.10 which is decent premium. This gives me a little room for the stock to pull back and I can decide in a few weeks whether to buy the stock in to keep the position (if the calls are in the money) or whether to let it be called away.

Feb 10, 2007

Well the market and NYX more specifically showed some pretty troubling signs yesterday. The stock traded down on volume significantly above average for the third time in the last 6 sessions. Areas of short-term support were broken and my calls now look very unlikely to be assigned. In fact much of the premium had been wrung out of them so I was able to close the calls for 15 cents and then sell the stock at 92.61 for a disappointing loss but the offsetting gains in the call position helps mitigate my loss and keep it from doing much damage to my portfolio. I now have another slot freed up that I can put something that is working better into and keep from dilluting my energies looking at too many names.

RVBD (Riverbed Technology)

Riverbed is in the computer networking sector and came public in September at $10.00. The stock quickly amassed big gains trading up over 50% from its initial price and never looked back. It took until December for the stock to make any meaningful pullback but it finally consolidated.

Yesterday, the stock broke out of a 2 month consolidation on the 2nd day of strong accumulation. The stock is liquid enough to put a decent position on and I decided to take a trading position as this setup usually leads to much larger moves.

Fundamentally the company is supposed to turn its first profit in 2007. This means that obviously the stock is valued at a steep premium to earnings, but those earnings could rapidly rise over the next year or two to easily catch up to the stock price.

Feb 10, 2007

The company released earnings on Thursday as well as announcing that they will issue an additional stock offering. While the earnings numbers and guidance appeared very healthy, the expected dillution from the stock offering (more likely the anticipated extra supply) caused the stock to sell of sharply. I was left with about a 15% loss almost overnight so after realizing that the stock is not going to bounce (at least initially) I went ahead and turned out my position for a loss yesterday.

DIVX (DivX Inc)

After coming public in September at $16.00 the stock doubled in 3 months time. Since early December, the stock has been settling down and giving back some of its excesses. It now is at a spot it looks good for a trade as it bounces off the $20 area where it first started trading.

Software has been a hot area and DIVX has strong sales and earnings growth trends quarter to quarter. They are definitely not cheap but it is hard to value a company that is growing earnings quickly and coming from a background where they are only recently profitable.

I expect the stock to get some momentum as managers see that the downtrend is likely complete and that should fuel some institutional buying in this name. The market will be a key factor as a weak overall market will punish risk takers. If we get distribution on the NASDAQ especially, i will be hesitant to hold the stock.

Feb 6, 2007

DIVX has traded up very nicely from its low and yesterday it crossed $24.00. The overall market was very slow and just felt a bit heavy so I decided i might as well take 1/2 of the position off and book some nice profits. I'm still bullish on the name but i wonder if the 50 day average will give any resistance. So I continue to be long but now have a realized gain to go along with my unrealized paper profits.

Feb 10, 2007

This week has been pretty busy so I apoligize that i am just now posting on this name. I was unconfinced that DIVX had much room to run at this time and since it was a short-term trade, and I had some growing concerns on the overall market, I went ahead and sold the rest of my position Wednesday at $23.34 to close the trade with a decent profit.