Tuesday, July 24, 2012

Stocks to Short or Hedge your portfolio

Some may ask what is hedging? Hedging is the process of protecting oneself against risk, basically if your portfolio is all going Long, you might want to take some Short position(Sell first, buy back later or Sell the share without owning it, it can be done easily using CFD). Normally, we hedge when we are not sure about the direction of the market.

 Swiber closed 0.565 today. After going for Sideway trend for sometime we see it turning down further. As compare to most stock in the market, Swiber's trend tend to be weak then most chart as it has been dropping slowly for more than 2 weeks. Good entry for Short will be 0.555 where it breaks below the previous day low. This is a mid term trade, meaning probably need to hold for 1month after entry, hence stoploss is place around 0.61(ard 10%away)
Ezra closed 0.98 today, after the sharp turnaround on 13 July, Ezra seems like not turning back. At this point of time, it is quite clear that it is moving down faster than it is moving up. Mid term wise this might be the beginning of a downtrend. IF market is going to be down, this might be one of the stock u will consider to Short. Entry will be 0.975, Stoploss ard 1.06, mid term trade. Timeframe ard 1month.