Taking Partial Profits in CPHI, Inching Back Into SDTH and Buying KONG Options

This morning I decided to take partial profits in (CPHI.OB), selling 20% of my total position at $3.25. I also began to inch back into (SDTH) by buying a small position at $6.80, and I bought a small position in (KONG) December $5 call options at a premium of $0.60. Given the fact that I’m currently in flight training for most of the market day, I’m now relying on limit orders for my trades, and got a bit lucky in getting out of CPHI at the high of the day. My idea regarding SDTH was to buy a small stake at the 50 day moving average and wait to see if the stock could hold that technically important line. Obviously it has broken the line, so while I’m willing to hold that small position, I’m not adding until I see some stability.

With regard to my KONG options, this is also a small position and I find it interesting due to the fact that KONG earnings are released today after the close. KONG is already a very cheap stock based on the balance sheet, and the healthy dose of pessimism creates opportunity if the company is able to come through with a halfway decent quarter. The stock is holding up reasonably well given the rush to sell China over the past few days, and that could be hinting that the company’s earnings may come in better than expected. This is an almost negligible position in the portfolio from a potential loss standpoint, but playing with options gives the chance for a reasonable gain if earnings do in fact come in ahead of expectations.

Comments

[synergyzhan:]

what's happening to SDTH? everything looks fine from their financial side, why is it declining?

2007 Nov 21 10:40 AM