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Pacific Sunwear of California Inc. Message Board

  • pmemd pmemd Jun 29, 2012 5:39 PM Flag

    I took out a huge short today

    at 1.82 this is going to be a nice ride back to 1.50.....

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    • Be careful. A dip back down to $1.50 is certainly possible if the overall market cooperates with you. However, the trend on this particular stock is not in your favor. Why:
      1. PSUN has historically done well in the late summer and fall months (with a couple of exceptions)
      2. We're having a particularly hot summer, which should favor PSUN
      3. Large insider buys recently
      4. Positive signals/outlook at the last earnings call (in part enabled by favorable comparison to a weak 2011)

      Put those things together and you should expect PSUN to run up going into the next earnings call (likely $2.5 - $3 in my opinion). And if they beat targets again (admittedly an "IF"), it could really take off in October/November ($3-5 in my opinion).

      I'm not saying your short position won't work out. Some of the above statements were true last year as well, with the exception of #3 and #4, and last year shorts did really well. I'm just saying that I wouldn't be short right now...

    • You will burn then my friend.

 
PSUN
0.0414Apr 13 4:00 PMEDT