1-800-PetMeds (PETS)

Company

PETS 1-year chart PETS 1-year chart

"1-800-PetMeds® is America's Largest Pet Pharmacy, a publicly traded company. We deliver prescription and non-prescription pet medications along with health and nutritional supplements for dogs, cats and horses at substantial savings directly to you. We serve millions of satisfied customers nationwide from one location." (company website)

PETS 6-month chart
PETS 6-month chart

Sell short

18-Aug-08. PETS has risen about 25% since early July and appears to be trading in an upward channel. If that's true, the price may fall close to $13 before beginning another up-cycle. Thus, I sold short, following my new strategy.

  • Price momentum (PPO) — PPO has crossed below the signal line and diverging sharply

Based on technical analysis, MarketEdge calls PETS a "hold long," but notes that the chart shows "mildly deteriorating conditions" and "indicates a possible trend reversal."

Buy to cover

gain Bottom line
1%

25-Aug-08. Right analysis, bad timing. If I had covered the position when I first noticed convergence of the PPO line toward the signal line, I would have made a tidy profit. As it was, PETS found support at the 50-day moving average and has begun to rise again. If it were a cheaper stock I might be tempted to see if the down-cycle is truly over, but I decided not to risk it.