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CAPSTech (77.87)

December Update

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December 01, 2009 – Comments (0) | RELATED TICKERS: REV , DVY , CVI

Well the first month of my experiment had mixed results.  Things largely went according to plan, except for two of my short positions ripping my face off.  At the time I'm writing this I have roughly -77 points, and those can all be attributed to my REV and LNY short positions.  I took the list of 5 star and 1 star stocks last night and ran them through my technical analysis.

I closed two positions in the past month due to ratings changes.  Although some of my existing positions are no longer in technical extremes, I plan on holding them until they either have technically reversed, or have a CAPS rating change.

I found two oversold 5 star stocks in DVY and CVI.  With the general market having rallied in November, I expected this to be a small number, but was still surprised at only two qualifying stocks.

I then ran the bearish technical screen on 1 star stocks, and found 20+ overbought 1 star stocks, including three which were on last month's list.  

The results is that now the CAPSTech portfolio is net short.  I find this interesting because I tend to be a bullish stock picker, but have had trouble finding value in recent prices.  This screen has ended up confirming my gut feeling that the risk trade has come too far and people are buying stocks that don't deserve to be bought at these levels.  

Of course I could be wrong, and be forced to watch more 1 star stocks double this month.

Until next time...  

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