While during the election day last week, I spotted McDonalds that it is trading very near to the resistance level, I initiated a short position with a stop loss.
I opened a total of 3 short positions last week, they are McDonalds, Lorillard & Airtran Holdings Inc. I decided to cover back my short position today!
Why do I cover McDonalds
McDonalds has recently just announced that they are seeing growth in their same store sales in Oct, that’s a good news to me. Therefore, the recent rebound on McDonalds has alerted me. Plus, I am seeing the turning of the indicators today as well, which signal a possibility change of direction to move higher.
Some may ask, the market condition has turned bad today as there are lots of bad news about AIG bail out plan, downgrade of GM stock… I can actually decide to sit tight to ride on the market down trend.
Instead, I decide to cover today simply because I do not want to take the risk. I cover today and I still sit on some little tiny profit, I do not want to see it turning red with a loss. Plus, my another 2 short position is giving me bigger profit than McDonalds, I decided to keep the other two and cover McDonalds. Finally, the deterioration of market has offered me some other attractive counter to short than McDonalds. I usually limit my portfolio risk exposure to have only 3 counters. I will need to cover back my current short position if I want to take on a new position.
Summarizing all the above reasons, McDonalds become the only short position I should cover.
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Cover McDonalds Stock Picks
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
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