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Time to Short Crox?

Discussion in 'Investing/Trading/Cryptocurrency/Altcoins' started by MJ DeMarco, Sep 5, 2007.

  1. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    This story reminds me of Krispy Kreme years ago. I remember getting into a flame war on a stock forum years ago when KKD was in the 40's -- I proclaimed that the stock and the company was a fad, and soon the stock would plummet. The KKD Kool-Aid drinkers were quick to lambash and cast me as a fool -- "Krispy Kreme is an awesome stock" the lemmings touted.

    I bought put options on KKD and profited a nice tidy sum in the months that followed. KKD is now a 6 dollar stock that only can reminisce about the glory days.

    Now, I see CROX setting up in a similar type position.

    Is the fad over and will the stock soon follow?

    Time to short and/or buy put options?
     
  2. Peter2
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    Peter2 Fastane Legend. RIP.

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    It's hard to tell. They will launch a line of apparel in October, and that could push the stock much higher if it's a hit. It's a well run company that is doing the right thing with expanding their business.

    I haven't looked in to the company very much, and have not listened to any conference calls, so I can't really make any predictions.
     
  3. kidgas
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    kidgas Contributor

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    Because I feel it is impossible to determine when a fad will end (ie when a hot stock will turn cold), I would go with the puts. The December 55 puts can be had for about 7 per share. Put on about 25-30% of the total position. Then, give it a week or two. If you are right, add some more or add some 50 puts at a lower cost. If wrong, cut your losses and re-establish at a different price since the stock has moved up.

    I like Livermore's technique of legging into a position and adding to it after you have a profit. That is what I have been doing with DRYS in the collar positions and it is working well.
     
  4. piranha526
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    piranha526 Contributor

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    Kidgas,
    I remember KKD because I had calls on the way up and some when it started to slip which I sold for smaller losses on the way down. It was more of a fad than crox.
    I (personally) wouldn't look to pick a top but if I did, i would wait until it was below the 50-day moving average (at the least).

    I do see one thing on the charts: a gap that hasn't filled from May in the low $30 range. In my 10 years of trading, I know this: most gaps fill and do so within a year.

    We'll see.
     
  5. kidgas
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    kidgas Contributor

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    I watched and followed KKD but never had any investment exposure, long or short.

    Thanks for the tip on that.
     
  6. MrDoctor
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    MrDoctor New Contributor

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    Hell yes I would short crox. I would do it now, it is near its high. Analyst are expecting their "mammoth" line to be the "must have" items of the holiday season :rofl:. Who would wear this crap?

    Overseas sales are stong, but it is not understandable as to why they trade higher than NIKE :rofl:.
     
  7. JScott
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    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Nike's market cap is nearly 7x that of Crox. The fact that the share price is higher is for-the-most-part meaningless...
     
  8. piranha526
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    piranha526 Contributor

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    Ironically, I wrote about CROX today:
    The stock (CROX) seems to be hitting some resistance near $60 but that is quite normal in this area. Look for a pullback of 10%-20% with support above the 200-d m.a. If is holds the support, develop a strong risk-to-reward trade setup and pounce with a possible $60-$100 run in the future. Do note that the stock has a gap-up from May that has never been filled ($30 lower than highs)! I agree with MrDr - who wears this ugly crap?

    As JScott says, share prices means '0' - nothing!
     
  9. kurtyordy
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    kurtyordy Bronze Contributor

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    Chris,

    What does 'gap-up' refer to?
     
    Last edited: Sep 7, 2007
  10. piranha526
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    piranha526 Contributor

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    When a stock opens higher or lower than the previous close.

    Example: XYZ closes at $58 on Thursday
    XYZ opens at 67 on Friday

    That is a gap which can bee seen on the charts!
     
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  11. kurtyordy
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    kurtyordy Bronze Contributor

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    thanks Chris.

    I just shorted 100 shares today at $64/share. I just missed the high by $0.95, but only of $0.38 now.
     
  12. kidgas
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    kidgas Contributor

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    I would be hesitant to try and pick a top on this one.
     
  13. TNT
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    I think you might do an option on These ugly things. Everyone is saying that the holiday season is not going to do well. I think companies like crok will take a big hit. With the way things are going you just do not know? I like options.
     
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  14. randallg99
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    randallg99 Bronze Contributor

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    If you have read their financials, you will see that their margins are probably some of the highest I have ever seen.... these fabricated `shoes` are real genuine money shaking money makers. Do I think the stock is bloated and the forward P/E is high? Yes. But I dont fight the tape.
     
  15. Rawr
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    Rawr Gold Contributor Speedway Pass

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    It is vastly popular in my university - the students can not get enough. And when I was overseas last month they seemed to have crox available at a lot of places as well.
     
  16. TNT
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    TNT New Contributor

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    Samething happen with the pet rock...LOL:banana:
     
  17. piranha526
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    piranha526 Contributor

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    The best comment on this thread, hands down.

    Mr. Dr.: Shorting a stock because it is at a new high can and will be deadly for you (only time).
     
  18. kurtyordy
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    kurtyordy Bronze Contributor

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    this little venture reminded me of why I hate individual stocks vs. options. The money moves too slow.
     
  19. Z5 FILMS
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    Z5 FILMS Contributor

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    I still call Crocs a fad. I think it's all downhill for them from here on out.
     
  20. Rawr
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    Rawr Gold Contributor Speedway Pass

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    Crox founder is on Big Idea in 3 mins on CNBC

    Edit:

    After viewing, some notes:

    The rubber shoe was just the cash cow, they know it and now they are using it to expand to another shoe type and apparel

    Clothing is apparently designed to be "after work" clothes when you get home. And get this - crox shoe material is woven into the fabric.. The stuff looked like swim body suits but you are going to wear them after work at home..hmm
     
  21. imirza
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    imirza Contributor

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    Looks to me like CROX is breaking out. With the market at all time highs , a run to $100 is probably a very safe bet. I would think we get there before January. From a technical perspective there was a bullish MACD crossover last week. The 50 moving average held support. A very safe place to go long.

    For all those who think CROX is a fad, look at the people who probably filed BK trying to short HANS. I'm sure there were many who though energy drinks were a fad.

    On another note, it does look like CROX biggest shareholder Mazama Capital is lightening up its position. http://www.nasdaq.com/asp/Holdings.asp?symbol=CROX&selected=CROX&page=holdingssummary . When the biggest institutional holders start selling that is the time to be getting out. If Mazama continues selling along with other institutional holders than CROX is likely to fall in price. The big funds are responsible for 99% of stock moves. The little speculators are fairly insignificant in the overall picture.
     
  22. piranha526
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    Still above the 50-d moving average and has not been a great short. Topping signals once again but above all major trend averages! be careful unitl a real signal is flashing!
     
  23. kidgas
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    I certainly don't plan on shorting any time soon. Things are going well enough on the long side.
     
  24. MrDoctor
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    Happy Holloween :eusa_clap:.
     
  25. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I'm not short CROX (thanks goodness) and looking at the chart, I wouldn't. Its a nice looking chart and there is no way I'd go against it. I'd have to see some sort of breakdown to make that play.
     

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