4/27/2010

How do speculative momentum moves end

In last one week we have been witnessing above average momentum. Once market participants realized that the Goldman Sachs news was just small problem and market rebounded, there has been a speculative frenzy in small single digit stocks in some sectors. The regional banks and many other single digit bank stocks  have had moves of 100% to 300% in matter of few days. Heavily shorted stocks have been behaving like lottery ticket.
All such speculative frenzies ultimately cool down. We are looking at first signs of such breakdowns in some of the high flying speculative stocks.
See these two stocks:
BANR: Banner Corporation

PCBC: Pacific Capital Bancorp
When playing momentum you must exit before the momentum party ends otherwise. The latecomers who are now figuring out how to find stocks with high short interest are most probably too late for catching  those moves.

42 stocks with red hot momentum as of Monday close:

ABR
AGM
APPY
BANR
BONT
CHCI
CMLS
CPWM
CPY
DCTH
DEAR
EK
FCH
HAFC
HOV
INTT
ISLN
JMBA
LDSH
LIOX
LPX
LSCC
MBI
MBTF
MHGC
MHR
NENG
NFLX
NPSP
PBTH
PCBC
PFSW
PIR
PMI
PURE
QLTY
RDN
SCSS
SMTX
SNIC
SPF
ZQK

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