With the debt deal still being worked on and keeping both bears and bulls sitting on the sidelines afraid to trade the headline risk, we’ve seen one of the most boring weeks I can remember. The bulls were starting to have some optimism, but republicans said the deal is nowhere near being a completed in a speech this morning. Obviously, that saw a sharp fall in the markets, but we’ve rebounded on very light volume since. It appears commodities were the best bet this week as the debt fears increase, the commodities also increase.
My trade of the week in PDL BioPharma (PDLI) had great potential and still looks fantastic while in consolidation, but this terrible low volume week has made this the most modestly green trade of the week I’ve had. Apologies for such a lackluster performance, but at least we have profits to take, even if they are modest.
With that being said, since it is Friday, I will have to raise a little cash and reduce risk before the weekend. I don’t anticipate a rally into the weekend, but hopefully us bulls see it happen. Akorn (AKRX) has had a solid, not great, move since initiating the trade and I will also take profits there as well. I will hold moderate positions in both and hold over the weekend, with the ability to add back next week. However, with PDLI having earnings on the 27th, I will be out of the trade before then with only profits at most riding into it. My style of trading is to keep the edge in my favor as much as possible without gambling too much on what the news might be.
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As always, do your own homework to see if you agree. Good luck out there.
Mike
At the time of publication, Kudrna was long AKRX and PDLI but positions may change at any time.
