The only variable positions in my portfolio are those that I initiate through technical analysis. Certain geometrical patterns appeal to my gambling mind, and when they pop up I tend to throw some money at them. For instance, look at BV and OCLR. I have no reason to own these stocks for any fundamental reasons, for they are absolute garbage by my standards. Is there a pipeline in the works between either of the companies for a strong thesis trade? No. Look at the charts below.

The key here is position sizes. Both of these patterns rely on the break of descending trendline, which often can fail if there is an overall bearish sentiment for the stock. The risk/reward is high. I never allocate more than 10% for a position like these. In this case, BV is sitting right at 10%, and OCLR is just below 5%. I am fairly confident with BV due to the high short float and the rather recent IPO. However, I have made a very bad mistake with OCLR. I held through earnings. The earnings report was awful, and as a result, their stock is set to drop by 20% tomorrow morning. I could have sold this at the close for a nice 10% gain.

So what am I doing this week? I intend to take care of business, if the market will allow me to do so. My overall plan is to position myself into my three favorite plays: USG, WNC, and SLCA. I will also keep my now reduced IMUC position. As you know, I already own USG and WNC. All three of the trades are based upon fundamental theses that extend out into the next few years. More on that will come later. For now I will ride out my RTEC and KLIC positions. If BV bounces, I will look to sell. I need to see just how bad OCLR will react tomorrow (if it falls under a buck it’s get the hell out of here time).

If you guys have any trades you think are worthy of mentioning, let me know in the comments section. Thanks ahead of time.

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