shorting the jumping cat

Discussion in 'Trading' started by heilbronner, Jul 22, 2003.

  1. I will short CAT today, seems to be totally out of equilibrium.

    To enter long at these level doesn't seem to be that smart IMHO.
  2. This will be a position trade. Think there are a lot of stops above 65.90, so we might even go to $66 and well above that level. So I'm ready to short at levels above $66. If CAT won't go higher than 65.90 I will short at the closing price.
  3. Well my decision is based on TA, but just for fun I have taken a look at the fundamentals.

    Cash per share: $0.90, this is next to nothing for a company like CAT.
    Growth rate: about 14%. This isn't the kind of stuff a highflyer is made of.

  4. How many shares are you doing? How long are you willing to hold? Will you add onto the position if CAT continues to go higher?

    CAT long term is definitely a good short. But for the moment I'm staying clear.
  5. 1)Not more than 10% of portfolio.
    2)Don't know, at least a few weeks.
    3) Yes, willing to add more.
  6. I read a commentary the other day--sorry forgot where--that described CAT as "what a fully valued stock looks like." This might also be a backdoor way to play the end of the dollar bear market.
  7. What is the trigger?
  8. This could be a 20-30 point trade over 6-12 months.

    Thanks for the heads-up, heil'.
  9. The trigger is a screening programm and my experience, but still I can be wrong. Let's see what happens.
  10. Another possibility the play the cat is a spread with the diamonds.

    #10     Jul 22, 2003