I have bought a bad stock that seemingly is getting worse. There just isn’t a whole lot about being long this stock that screams, “I know what I am doing buying this, trust me!” So, why would I buy a stock that is in a pronounced downtrend, where the momentum to the downside is picking up speed all the while the name sports a short percent of float of upwards of 20%?
You got me there. I have no idea to be honest other than I probably have some genetic defect that renders me incapable of making quality trading (and life) decisions.
Truth be told, I do have a reason. A reason based on sound statistical probabilities in a new mean reversion trading technique I am testing. Because I haven’t tested this thoroughly enough, I would hesitate to recommend that anyone else follow this trade.
For now, just know I am long $FI stock at $9.01 with a stop I am closely monitoring 1.5 ATRs below. I would have gone options but they are horrible for this name. If the spreads tighten up I will look to take some May 10 calls.
Like I said, nothing about this name looks promising other than we are running out of people to sell it. It is nearing an oversold level bordering on a statistical anomaly. For that reason, I am involved, probably stupidly but would you expect anything less?
