Parabolic moves like these useless stocks is a typical indication that we are not far from the near-term top. There are tons and tons of stocks that have made parabolic moves like DDRX and that is just NOT sustainable. Besides, take a look at $NASI, $NYSI, $NYA50R etc. and all of the technical indicators are screaming an extrememly overbought market. I would keep my eye on $VIX to spike to confirm rising fear/panic in the market so that all the people in bullish "green shoots" camp have to think twice about their opinions!
Upcoming catalyst on May 4th: Stress Test results. "Buy the rumor, Sell the news" reaction is expected!!
Long Puts : QAVRF, XLYRV, PXDRD , QAVQE
3 comments:
Is this just a play on GMCR? I am kicking myslef on GMCR, I should have bought it last summer when McDees starting getting serious about Coffee. But I could not get on any of these parabolic moves.
Do you have any thoughts on AXP?
GMCR has a great short interest and hence it moved so wildly. AXP is moving today on MA and V earnings. It's way overbought and will sell off soon. They have massive exposure to credit risk which MA and V do not. Lets see how it performs next week when the stress test results are made public.
OK, thanks. I own a several Put Strikes on AXP. I became extremely bearish on AXP when they started pulling credit lines left and right. I thought "oh boy, these guys are in trouble." But then with Bernanke helping them with liquidity I wanted to wait for their run-up to short them.
If DDRX has returned to profitability, then this move up could be justified. They were priced for bankruptcy. They are trading at ~1x earnings.
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