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SSS - Thoughts on the Short-Side for Friday Morning, October 7th, 2011

Despite the market rally, most big former leading stocks have simply rallied up into logical resistance. CMG continues to find resistance at the $300 price level, while AMZN continues to find resistance at the 20-day moving average. If we are short these stocks these remain guides for an upside stop, although one can use tighter or looser stops depending on their risk tolerance and preferences.

AAPL is interesting in that we might expect the lifting of the cloud of uncertainty regarding Steve Job s to cause the stock to rally, but yesterday it ran right into the 50-day moving average and turned tail. IF AAPL's weak 12x forward P/E was a "Jobs discount," then that alibi is now out the window, and if AAPL can't rally then the 12x forward P/E might be a harbinger of some other issue ahead for the company. Thus shorts could be taken in AAPL using the 50-dma as a maximum upside guide for a stop.

Other stocks rallying into resistance: VMW, RAX, FOSL. Remember to maintain 3-5% stops on any short-sale positions taken.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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