Hansen Soars Again--Time to Lock In Profit!

Hansen Natural (HANS) was up another 14% today, breaking $200, on top of a 16% gain yesterday. Then for good measure it was up another 1% in after-hours trading. Yesterday there was good news to move the stock, but today the only news was that Goldman, Sachs initiated coverage with a buy rating. The iconoclast always trades against an analyst pronouncement if there is no other news to move the stock, so I'm going to put a trailing stop on half my shares at about $10 below today's close (ignoring the after-market price). The philosophical reason I trade against the analysts is that they aren't any smarter than the market, because they pretty much are the market. The practical reason is that the effect of an analyst pronouncement usually fades away in a day or two. When you add in the fact that the stock is already in a parabolic pattern, I'm convinced it's going to correct pretty hard and there will be time to buy back at a lower price.

I unfortunately don't have a lot of experience trading on the right side of a parabolic increase, so I don't have any rules for where to set this stop. I pretty much picked $10 out of my hat.


A minor holding in Veeco Instruments (VECO) hit my stop and was sold today. This was a casual purchase in the nanotechnology field. The sector looks promising but I don't know how to evaluate the companies and I have mostly lost money in it. Motley Fool, a favorite contrary indicator of mine, bashed Veeco and mentioned that it makes machinery used by nanotech companies. This seemed to me to be a sensible way to play the sector, it has a miniscule profit, and the chart looked good, so I bought a little a few weeks ago. Starting April 28 it went up smartly 7 days in a row, which put me on sell alert. Today it started correcting seriously so I set a tight stop and took about a 10% profit.