Remember Vornado Realty Trust (VNO)? Well, I'm back to shorting it with this new August puts position. Yesterday, Ultrashort Real Estate (SRS) tanked about 9% to touch \$13 while the overall market is mostly unchanged. I also noticed some big down TICK (\< -1000) were finally appearing. This is a sign that big blocks were being dumped. We haven't see those in a long time.
I tried to short VNO near the close but the price never came back to me. VNO stayed below \$54 resistance. So I held my bid to wait for today. We seem to have a lot of bear traps lately so it's better late than early. Well, today we broke above \$55 to touch \$55.61 (a major resistance) and backed down immediately. In the first half hour alone, it seemed like VNO is starting to decline. This is a good sign since S&P500 also broke below 1000 in the first half hour with some big negative TICK (\< -800). This is definitely going to be an interesting day.
What enticed me the most in VNO is shown in Figure 2. VNO has been respecting the Fibonacci fan lines from the recent crack of late '08/early '09 very well. So this failed push above it this morning was a good signal for me to go short now (coupled with the market weakness).
Target: \$47, but looking at \$43 in the intermediate term (prob need to rollover the puts)
Reward / Risk = 7.6 / 0.9 = 8.4
[caption id="attachment_1655" align="aligncenter" width="500" caption="Vornado Realty Trust"][/caption]
[caption id="attachment_1656" align="aligncenter" width="500" caption="Vornado Realty Trust"][/caption]
: http://traderpau.files.wordpress.com/2009/08/2009-08-05-vno.png : http://traderpau.files.wordpress.com/2009/08/2009-08-05-vno_prop.png