Travelzoo (TZOO) Fills the Gap

Speaking of filling gaps, I mentioned a week ago Monday that Travelzoo (TZOO) looked poised to short for those who were nimble as the stock was extremely extended over any major support level.

For the very nimble there might be a shorting opportunity here… as they say, it is a bit “extended”. Usually when a name moves this far away from any form of support, it comes in…. err, unless it is silver.

When I wrote that the stock was just under $103. The next day it opened at a similar price and proceeded to implode down to the mid $80s. It has been down each and every session since then (6 days) and now trades in the $73s. Now to be fair, if I had listened to my own advice and put on any puts or shorted the stock (if I could locate it), I would have covered well in advance of today. Heck a small portion of a portfolio (1%) allocated to puts on a stock that falls from $103 to $85 in one session would bring a wonderful amount of return for very little risk capital offered up for the trade.

Bigger picture it is interesting to see a whole host of the “momo” trades falling apart the past 1-1.5 weeks. One wonders if that is signaling something else, as the general indexes hold up quite well.

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About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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