Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

ROOM and EXPE, the continuing story....

This is like a proud momma showing pictures of her successful progeny. We had long shorts in IBM, QLGC, ROOM (not always successful and at times quite frustrating but we hung on) KLAC, NVLS, INTC CCMP ELX QCOM and even more earlier on such as GNSS, CCMP DPMI MANU FNSR IWOV JDSU CIEN AMAT INTC etc.

>>Jenna, you have me and some others(e-mail I have received)
totally confused. In post #9731 you are bearish on EXPE and ROOM, another post Travel and Leisure are going down and EXPE and ROOM could fall 10 to 15 pts.>>>

OKAY let me explain. I feel quite a home with ROOM and EXPE.
At the time I was waiting for my target which was 40 on EXPE and 45 on ROOM. We revised the target downwards after we got 45 on ROOM and 40 on EXPE. For two days after that post we had 2 unusual moves in EXPE

We began to short EXPE in the 81-84 zone.







1) down after hours yesterday which was rare, and we posted the recommendation to get some good profits locked in

2) and an additional gap and crap this morning to 37.70 which was quite nicely above my 40 target INTERIM. Unfortunately because I already had my long positions in place by 10:30-11:00, and I was not tracking new positions as I was not at home. I could not actually call or post the rally in EXPE which was really written on the wind already.

http://www.investorshub.com/boards/read_msg.asp?message_id=530940
http://www.investorshub.com/boards/read_msg.asp?message_id=530873

3) ROOM was as low as 41.20 which is well above my target of 45, so if you look at the BIG PICTURE and that's how I traded about 1/2 dozen of my longer term shorts, this was a COUP and not to be passed over.



ROOM is tracked every cycle down.. with final target as you can see the July lows.



but intraday once room moves lower, it does have a tendency to rally intraday at key support levels, and that's what happened today.

HOWEVER, its dangerous not to be wary if you are daytrading this to ignore morning gaps and craps that can reverse, and that usually coincides with Nasdaq rallies. TAKE SPECIAL care to watch ROOM and EXPE at the REAL MARKET DIRECTIONAL trend change at 10:15 to 10:30.




This is important you understand that when you have sudden CLIMACTIC sell offs AFTER the close and once AGAIN IN PREMARKET, YOU SHOULD BE TAKING PROFITS because you know others are going to lock in profits from the 55 area. EXPE and ROOM have large short interest and its rare to even get a short position going when its down every day.

I am not bullish on ROOM or EXPE, but I do know that they have an uncanny tendency to rally after hitting 6-7 sessions in a row of strong down days. We just had to rush our covering a little early because the target was rushing at us.

For ROOM my target was the 45 puts and ROOM was a disaster last month so it was just a matter of how low below 45 ROOM will go before there will be massive short covering.

Another important point is that earnings are still far enough away for us to rally more than once before the actual report. In fact we called EXPE long for a temporary bear flag late in September.

I am NOT BULLISH LONG TERM. I am slightly bullish short term and quite BEARISH long term but this profit had to be realized.

I think perhaps the confusion comes from the fact that I do expect another bite down in both of these with potential targets of 30 or lower for ROOM and 30 or lower (maybe even 25 for EXPE). ROOM has even worse earnings than EXPE so I don't see the allure, but its a great trading vehicle on rallies.