The bears are getting loud and that’s been a short-term reciple/indicator for a bounce the last few months or year or so. I’m looking to start scaling back into some more longs and have been covering a few shorts like the $P as noted Friday and next, with my $PLUG puts.
I bought the $PLUG puts when the hype around the stock was apparently at its highest, and so was the stock price, at least for the short-term. $PLUG is down 16% today and is now down 60% since I wrote, “I’m buying $PLUG puts that expire in April or later and have strike prices from $12-15. And I’m buying a tiny bit of some $BLDP puts that expire out in May with $7 strikes. These are VERY RISKY OPTION trades,” in Trade Alert – Trimming our biggest position and buying puts on two bubbled fuel-cell stocks.
That was just two months ago, and although I’d already trimmed some of those PLUG puts, I held onto some using my usual tranche-approach to buying and selling by not exiting the position entirely all at once on the first drop. These remaining $PLUG puts are up several hundred percent and I’ll take my entire profit on them now and move on.
At the time I added those $PLUG puts, I’d noted that we wanted to use them to hedge some of our existing long positions that I was also trimming down at the time. The markets and the bubblicious stocks were both at all-time highs and I was, as I noted, “growing increasingly bearish about the near-term.” Specifically, I’d written:
“The weakness in the momentum highflying stocks like Tesla, Zillow, and DDD remains noteworthy. I’m growing increasingly bearish about the near-term, but not necessarily changing anything in the portfolio.
I am however going to trim down a bit of our biggest position, Facebook, just to lock in some more profits. I’m also going to buy puts in some crazy bubblicious stocks like the currently ongoing and crazily spiking $PLUG and $BLDP, which are fuel cell related stocks that are up 1000%s in the last year and have gone parabolic in the last few weeks and days.”
That weakness has indeed carried over into even well-positioned Revolution Investing stocks from the long side of our portfolio, including Facebook. I’m not in any rush to add more to my Facebook, but as I’d also noted recently, I’ll buy more if it gets to $50 in the near-term. It’s not there yet. With all the short covering following on top of my prior long trimming, I’m heavier in cash than I have been in a while. Taking the pitches as the markets throw them, and following our playbook. I plan to start increasing my long exposure and scaling into some of our long names again in coming days and weeks. Not today though.