The trend is your friend until it ends. Let's hope it does not end.

Editor's Note:

I have been waiting on a bounce in tonight's short candidate because I hate to jump on a stock that has gone down routinely for a long time. However, even when the broader market was up strongly last week this stock did not rise.

I know everyone has looked at charts in the past that went up or down in a straight line for a long time and wished they have jumped on the bandwagon a long time ago but we waited for an entry that never came.

Sometimes you just have to bite the bullet and jump on the speeding train.


NEW BULLISH Plays

No new Longs today


NEW BEARISH Plays

Ingram Micro - IM - close: 14.72 change: -.20

Stop Loss: 15.65
Target(s): 12.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Ingram is a technology company that sells all types of computer hardware and components. The hardware sector is very soft today. Companies are holding off on new purchases until they see how the election plays out and what happens to the fiscal cliff.

Ingram posted earnings this week of 39 cents that beat estimates by a penny. Revenue only rose +0.3% from the year ago quarter. Currency translation cost the company 5% of their earnings. The company used the Europe excuse for the lackluster earnings.

They also complained about product mix saying customers are buying cheaper products with lower margins. Expenses rose +2.2% and operating margin declined to 4.0%. That does not leave a lot for profit.

They guided lower for Q3 saying revenue would be flat and gross margins to decline further. They warned they would be facing an additional interest burden of $2 million for debt incurred to fund the Brightpoint acquisition.

Wednesday's close at $14.72 is last ditch support dating back to mid 2010 and again in March 2008. The stock traded lower in the recession to $10 and below. If Ingram declines below today's closing support I believe it will retest congestive support at $12.

Trigger @ 14.60

Suggested Position: Short IM stock @ $14.60

Premiums on options are skewed so shorting is the only play.

Current Portfolio:

Entry on July xx at $ xx.xx
Earnings Date 08/09/12
Average Daily Volume = 1.3 Million
Listed on August 1, 2012