1/25/2021 Indexes up a bit this week, still bullish. Shorted XLE as a hedge and looking to try a new strategy.

Hi everyone, I hope you are having a great Monday!

I shorted XLE on Friday as a hedge against my MRO position because I was a bit scared that we might have a deeper pullback. I ended up shorting about 80% of the dollar value of MRO, so it’s not a perfect hedge. MRO is a bit more volatile compared to XLE as well, so I expect to get about 60% of my losses to the downside back if markets go south.

Markets are continuing to grind higher, and although it’s worse and worse to be buying the indexes at current levels, I don’t think there will be much of a pullback anytime soon.

I’ve been thinking of testing out a new strategy and will likely enter some positions today. The strategy is the same as my usual strategy (buying pullbacks in uptrends, and shorting stocks bouncing in uptrends), but doing multiple of these trades at once. I’m focusing on going long and short at the same time to reduce overall market risk.

Below are trades I’m considering (in order of preference)

Long: ORCL, GPN, PEP, ICE, MTCH

Short: FANH, IQ, REGN, EHTH

Some charts below of longs I plan to take:

Charts below of shorts I plan to take:

FANH probably isn’t liquid enough for me to take the trade though, but the chart looks good.

Some things to note. GPN, PEP, ICE, MTCH, REGN have earnings in 2-3 weeks, so these trades may have to wait until earnings are over.

With that in mind, the really good trades are: long ORCL, and short IQ.

Enjoy your week, and please stay safe.

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