Underinvested and Buying By Rev Shark RealMoney.com Contributor 2/1/2011 11:28 AM EST
I don't know how many times in the last two years we have seen the market come roaring back just when it seemed to be on the verge of a breakdown. The action on Friday looked like a classic precursor to further weakness, but it was timed fortuitously just in front of the start of a new month. The tendency for the market to make gains on the first day of a new month kicked in with a vengeance, and now it's as if Friday never even happened.
In fact, the weakness on Friday now looks like nothing more than a bear trap that is adding fuel to the upside as shorts rush to cover and underinvested bulls look for buys. I'm one of those underinvested bulls, and I am working hard to find some trades. It feels like panic-buying in many cases, and that always makes for difficult entries.
I've taken positions in Nanometrics (NANO) , Cheniere Energy (LNG) , STEC (STEC) and Korn/Ferry International (KFY) .
I also added some shares of Quepasa (QPSA) , which is the Latin American Facebook play I mentioned last week. The company announced the acquisition of a Brazilian game company today. I believe this is a story that will continue to attract buyers. However, it trades thin and is volatile, so it needs to be watched closely.
At the time of publication, Rev Shark was long NANO, LNG, STEC, KFY and QPSA, although positions can change at any time.