|
PureBytes Links
Trading Reference Links
|
A friend of mine that manages money pointed out to me an opportunity when a
stock gets added to the SP 500.
The day it is added there is a scramble at the close for the index funds to
perform portfolio re-allocations. Dumping the dropped stock and adding the
new stock. The buy on close orders create a buying vacuum on the opening
the next morning and the new stock is usually good for a small retracement.
In other words, short the new stock MOC and cover with the first 30 to 45
minutes the next morning. Don't hold longer than that and use a very close
stop. The stock should open flat to lower and drift lower the first 30
minutes. If it opens flat or higher and starts moving up immediately, get
out. I've done this four times and made money on all of them. Although let
me caution you, I've watched a couple move up immediately the next morning
because of strong broad market opens.
This trade is good for a 1 to 1 risk reward.
Howard
>From: "JW" <JW@xxxxxxxxxxxx>
>Reply-To: JW@xxxxxxxxxxxx
>To: <realtraders@xxxxxxxxxxxxxxx>
>Subject: [RT] Yahoo to be added to S&P {01}
>Date: Wed, 1 Dec 1999 01:25:31 -0800
>
>Standard & Poor's said it will add Yahoo! (YHOO:Nasdaq) to the S&P 500
>index at the close of trading on Tuesday, Dec. 7, reflecting the
>growing influence of Internet companies. Yahoo!, with a weighty market
>capitalization of $56 billion, will bump Canadian school bus company
>Laidlaw (LDW:NYSE) which Standard & Poor's said was being removed.
>
>---
>JW
>
>
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
|