Intro coming soon…
Short Sale of the Day #1: Citi Trends Inc. (CTRN)
Analysis: The market is completely bugging me out over the last few days, and I cannot seem to get a really great read on its direction. It appears to be opening down, but futures have moved up after a worse than expected consumer price index report. Huh? I am trying to stay away from the normal selections today that I like to get involved with on fundamentals and go for a strictly…this stock should not be this high…even if the market is doing well or bad. That stock is Citi Trends Inc. (CTRN). This small company produces “urban clothing” and reported some solid earnings this morning with an EPS of 0.86 vs. the expected 0.67. The company saw a 27% rise in revenue year-over-year, and the crucial metric was a rise in their outlook for the FY to 1.75 – 1.80 EPS vs. the expected 1.68.
The stock, therefore, has gained rapidly over 6.5% this morning in pre-market. This is a red flag for me for a possible short sale if the stock is getting into territory where it is above its upper bollinger band and will be overbought because that means profit taking should occur. The company’s upper band is right at the 36 level, and the stock is trading in the mid 35s, meaning it does not have too much more room to the upside before it will probably meet some solid resistance and be driven back down.
We can look to play CTRN through a short sale or through some $35 puts. The stock I would expect to continue a small rise this morning before making a movement back down. Futures were down significantly with renewed fears over Europe arising, and they have come up somewhat. Yet, yesterday, the market looked to have some very solid fundamentals and sold off the entire day. My guess is that we should continue to see more pressure on the market again today, which will also help to bring down CTRN.
Look for CTRN to have a small rise to start the day and then get in and ride it down.
Entry: We are looking to enter at 35.85 – 35.95.
Exit: We are looking to cover for a 2-3% gain.
Stop Buy: 3% on top.
Short Sale of the Day #2: The Crude Inventories Trade – Direxion Daily Energy Bull/Bear ETF (ERX/ERY)
Analysis: IN PROGRESS
Entry: We are…
