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ducktheherd
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Finance/Economics - boutique B/D / banking firms for past 8+ years, sales and trading (extensive focus on technical trading), equity research, valuation analysis for small banking projects $3 - 15mm Licensed 7,63,65,24,86,87,79
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  • Profitable TRV Short Update; Taking Profit Vs Selling Puts

    I spoke about shorting TRV originally on May 2 when the stock was trading above 84. The stock has given ample opportunity to build a short position over the past month and depending on your average cost (between 84 - 86) you should have a nice profit in hand.

    At this point, you can either cover the short and take the profit, or look into selling puts to generate more income on the trade. For instance, the July 77.5 puts are bringing in between 1.45 - 1.55 and could add an extra 1.5% to your profit.

    Good trade.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jun 24 12:41 PM | Link | Comment!
  • Insurers Rolling Over: ALL First, Now Its TRV's Turn

    Quick update on the insurance short positions, ALL has pulled back significantly, and should find support at the longer term uptrend. See below.

    (click to enlarge)

    How the stock reacts to the uptrend will determine the future of the shares. It could bounce and continue higher as it did in later Nov 2012 and Jan 2013, or if it breaks I see support at 44, 38/39ish and then ultimately the gap fill at about 35.

    As for TRV, the stock has been trying to hold up as best in breed amongst the insurance names, and that is a key point to note that if you see the "best of breed" names in a sector starting to get "toppy" or looking to roll over, you can find the weaker names and play the more aggressively to the short side.

    So TRV is peaking down through the line drawn from Dec 2012 and making a low from the cluster of trading days for the past week and a half. To me this shows weakness, and I expect the shares to continue to trade lower and to trade to the 150 day MA.

    Keep in mind, there is an intermediate term uptrend that depending on time, could meet the stock around 80/81 and if that is the case we shall watch to see how the shares react.

    (click to enlarge)

    At $82, investors that have taken a short position should have a profit of roughly 5%, which isn't going to send you off to early retirement but not bad inside 30 days especially when you consider the minimal risk that comes with shorting a large cap.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jun 05 3:36 PM | Link | Comment!
  • Update On TRV Short

    My last post was on May 2, 2013 when I talked about TRV looking like it was setting up for a pullback after a nice move to the upside. Investors have had all month to slowly build a short position in TRV and if you have taken my advice should/could have a cost basis around $86/$87 per share.

    Currently the stock is trading $83.25, has broken through the 50 day MA last week, and I would expect to see the shares move lower.

    I have attached a chart showing where the shares found a minor support level yesterday (uptrend line roughly 82.5) where they have bounced, but as this is a minor level, I would expect the bounce to be short lived and the shares to move lower.

    Also, please note the short term moving average (green line) is trending down and I would expect it to cut through to the downside of the 50day MA.

    (click to enlarge)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    May 28 4:48 PM | Link | Comment!
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