here goes my list: crm cal goog (*entered today as a hedge for a tech long I have) rimm (*entered today as a hedge for a another tech long) msft gm kbh The parenthesized shorts are my weakest without too much conviction, but I have an explanation for every one here.
I would recommend not shorting KBH. It currently has a PE ratio of 4.23 (very very low) it has found solid support at 40 and is currently trading at 44.68 The homebuilders sector has be greatly beaten down over the past year but has bottom in August and currently trading pretty much sideways for the time being. Unless your trying to scalp a point or so I would NOT short KBH
The company is in default in some of its debt, the earnings are nowhere to be found, and those PE numbers are trailing. Once this company has to write down book value on excessive inventories, give real guidance as to significantly reduced future earnings, mid 20s (2003 levels) isn't unrealistic considering how this market likes to beat up anything under expectations. Remember the housing market was still booming in 2003 - so this isn't unrealistic. Also - just because its consolidated above 40 and stabilized doesn't mean we're not ready for another leg down. Its amazing the homebuilders have done so well up to this point - its a testimony of the blind optimism the market has for these companies. I'd like weakest of weakest sectors going forward. My bet is that we're just at the beginning of a long cycle of housing price correction. Home builders are already leading the pricing of market down with massive price drops to move inventory, which has recently been successful (according to many reports). But with increased commodity costs, increased building costs (labor, materials, land costs) there will be significantly declining margins on anything new built. My arguments for RIMM or GOOG aren't as substantial. Therefore weaker hands. CAL is a play on oil actually - it may be a little early though. My thought is a resurgence of oil prices will kill the rally (from 23) its had. This thing likes to run up seasonally (holidays). And rallies (goog and rimm) can't continue forever (although sometimes it seems like they do). All of these shorts (and longs in my portfolio) boil down to one thing (for me): fundamental economic bets. I'm betting on continued commodity bull, US economic slowdown, and housing collapse.
A good short selling candidate is AKAM or akamai. Look at the chart and you will see why. I have 20 puts in the thing if it goes to 35 I will make 20K. CME is worth looking at and google is going to be weak the next week or more (maybe it will make some kind of lame consolidation\continuation pattern) Just my 2 cents.
http://biz.yahoo.com/ap/061027/kb_home_default.html?.v=1 1.65 billion of debt on the 2018 notes. KB offered note holders .75 basis points to get them off their back, as they can't file their quarterly reports in time. also in potential default... Last week, the company received a notice of default for its 6 1/4 percent senior notes due 2015 because of the tardy report. Companies typically have 45 days from the end of a quarter to file with regulators.
It looks a lot like a descending triangle pattern. It is not good when your bottom is flat while your highs descend that support does not usually hold. Coupled with some weakness before (look at the day when it gapped down and opened @ 50 and closed @ 49) and you get the bearish outlook.
AKAM is trying to survive just under 50 DMA. It is getting dangerously close to 45-45.50, once that is broken with strong volume, it's over for a while. My 02 cents.