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09-Aug-08
Shorting Bank of Amerika
As you know, I hate Bank of Amerika. This article should outline a few of my reasons: Bank of Amerika
Anyway, while it is generally not a good practice to short a company, due to sheer hate of them, I am making a small exception here. I have been watching for Bank of America Corporation (BAC: 32.25 +2.32%) to show signs of some weakness, so I could start a short position, without shorting it only because I hate them.
Lets look at the chart…
BAC roared off the Fed. induced, SEC manipulated, July bottom, due to a huge short-covering rally. We can see that its advanced has stalled, midway between the 50 and 200 day averages, and just under multi-month resistance.
MACD is getting ready to cross, and RSI2 is in a neutral zone.
Despite the markets roaring ahead the past week or so, you can see BAC has done nothing. With the downtrend still firmly in place, I think BAC revisits the 50 day average, or hopefully worse.
With these things in mind, on Friday, I began buying puts on BAC, near the HOD. I did not bother trying to short it, with all the SEC no-short shenanigans.
I will look to sell my puts on any pause at the 50 day average. A break above 34.00 will have me reconsider this position.
Tagged Stocks: BAC
Posted at 06:56 in External Blog | Permalink | Comments () | Top
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