RSS feedOriginally Posted April 17, 2007
It seems that this blog is increasingly becoming a trading journal as opposed to an educational blog on investing and I apologize. For those that are interested, I wrote a post on my thoughts on investing in gold (which us small investors can do very easily through gold ETFs like GLD and IAU) and how to use it in your portfolios as a diversifier (but definitely not as a hedge as I attempted) on my other blog, Curious Investments. Not quite ready to do any commodities related topics here at The Curious Investor but I play around with a lot more investment ideas and strategies over at Curious Investments.
Anyways, I purchased Piper Jaffrays (PJC) with the cash I made from selling QID yesterday. Why did I do this? I did say that I was going to be happy to stay in cash when necessary in the future, but I do believe that the market is primed for a bit of a rally here over the next month or two (with the possibility of another correction in May or June) especially given the recent surge towards closing the gaps made in 2/27. As such, I do hope to ride the wave so to speak and Piper Jaffrays seems like just the technically strong short term investment that I like. The stock just bounced up off of its 200-day moving average, quickly crossing through its 20, 50, and 90 day moving averages for an assault on its upper Price Channel bound. RSI and MACD both crossed into buy territory and volume over the last few days has been strong to the buy-side. I’m a bit wary of the stock having straddled its 200-day moving average over the last month, but do believe that it is fundamentally sound - having a ton of cash, very little debt, and good valuation ratios (P/E and Price to Book specifically) - so I’m not overly worried about the downside risk. The hope is to cash in on a quick run over the next month plus (hopefully in the range of 10%) and move on. I’ll be happy to take profits around $70, but am looking at a target of around $72. Alert points for me will come as the 20-day moving average begins its crosses up through the 90 and 50 day moving averages.
Thoughts on May 23, 2007
Well, I didn’t quite do my research on Piper Jaffray. The movement that I bought was apparently speculative movement leading up to an earnings report which came out just two days after I bought. It was not favorable.
But, I liked the fact that the stock didn’t get killed as a result and due to my quick look at Price-to-Book and P/E, I had a little faith that maybe Piper still had some gas left in it. The 200-day moving average has inverted since and the stock continues to straddle it which could be a bad sign, but I guess I’m a little optimistic. Price movement in the last few weeks has been positive and it looks to be ready to signal a break out. If, however, we see a break down on high volume, I’m going to stop out ASAP.
