Wednesday, April 7, 2010

SVN

I just shorted 800 shares of SVN @ $11.044. I am risking about $300.00 including commissions on this trade. Although it was my intention to get short just below $11.15, I missed that entry opportunity due to not paying attention and took a lower entry price.

I am looking for at least a one point move down into support around the $10.00 area but believe that it will move down a lot more than one point. My reasoning is that i) SVN is very weak; even while the overall markets were rallying SVN broke support around the $12.00 area on heavy volume and is now trading just off all time lows and ii) the markets are all very over bought short term especially the FXI which has close up in 6 out of the past 7 sessions and due at least a one day pullback and iii) most of the former leading Chinese stocks have been breaking down on heavy volume after earnings announcement and look very weak even while the FXI has been rallying.

These factors in addition to the set up have lead me to conclude that a short trade in SVN is a very high probability low risk trade at this point in time.

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