September 25, 2010 | In: Financial
FAZ Is Starting To Look Delicious
I have written earlier about playing with FAS and FAZ, which, IMO, are probably the most interesting stocks out there. Generally, and in the last couple of weeks, the DOW was moving up, and FAZ was going down. But, I have noticed that FAZ’s support $12.70 (that is tested 9 times so far) is pretty solid, and FAZ rebounds at least a buck or two when it tests this level. Remember that at one point nearly a month ago, FAZ broke higher than FAS (they meet at around $17).
There are lots of bad news that are still coming: Greece and Europe in general, Bernanke speaking, unemployment, etc… It’s a rule of thumb that stocks cannot go up (or down) forever. Next trading day is Monday, I predict that stocks will go up until around 12:00, and then they will drop, and the DOW will close lower (for some reason stocks always go up on Monday morning).
IMO, the current rally is unexplained.
On another note I sold my IMAX shares at $15.85, for a small profit. I didn’t want to get greedy and wait a bit, although if I waited for 24 hours, I would have made much more money, as the stock went up to $16.85 the next day, and I had a lot of these things.
I want to get rid of BAC and MFC (I think MFC has excellent prospects btw, but I just want to get rid of it for now).
I will try to buy FAZ somewhere below $13 this coming Monday, not too much, but enough to make a decent amount when the stock rebounds. There is no reason whatsoever for the DOW to continue going up.