It is important for us to realize that with the volatility we are seeing right now, being down a little right away in the morning is not that big of a deal. I was down about $1,000 right off the bell when all my ideas went the other way. I bought some Fuwei Films (Holdings) Co., Ltd (FFHL), which was a Navallier pick. It went up, but I couldn’t get with the size I had and wound up taking a loss on most of the position. So I stepped back and just watched. And of course, the market came to my rescue.
My first good trade of the day was Rediff.com India Limited (ADR) (REDF). I caught the move from $6.80 to $7.20. It was a nice trade as I was looking for continuation off of yesterday’s strength. My play of the day, Travelzoo Inc. (TZOO) is currently up over $2.00 on the day and $1 above my trigger buy point. The only problem for me is volume. I didn’t want to enter at 9:30 on 50k shares traded. I cant trade a stock like that and expect to be paid consistently. There was no real entry if you weren’t long over night.
But enough about that one. Let me talk about the rare earths, which are not really doing anything today. They gapped up and Molycorp Inc. (MCP), China Shen Zhou Mining & Resources Inc. (SHZ), and Avalon Rare Metals Inc. (AVL) all went red. I shorted MCP looking for a flush through yesterday’s low’s of $53.50, and got it to a certain extent. I am also holding a few Rare Earth Resources Limited (REE) Jan 16 puts, since I can’t locate REE shares to short today. It has been a patience trade so far, but at this time I am currently in the money on the options. Will we finish the day with the flush I am looking for? Time will tell. Good luck the rest of the day!
*DISCLOSURE: Short REE
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