Sunday, February 27, 2011

UPDATE: Clean Energy - Last Year's Trade?

My original post was written Feb 13, 2011, shortly after Congress proposed deep cuts to clean energy funding.

At the time of writing, there were no near term catalysts that were expected to give clean energy any type of  boost. However shortly after writing the article Libya blew up and WTI oil prices subsequently spiked. Triple-digit oil prices suddenly make alternative energy plays like CLNE or WPRT much more attractive.

Those who follow me on Twitter were notified when I covered my shorts in WPRT and CLNE. On Feb 17 I covered my WPRT short @ 15.81 for a 8 cent loss and on feb 18 I covered my CLNE short @ 11.96 for a 12 cent profit. Within days both of these stocks screamed higher along with global energy prices.

Chart: WPRT

Chart: CLNE

I was fortunate enough to cover my short positions in each of these stocks, which saved me from substantial losses.

This highlights 2 important lessons:
  1. Never become married to a position or a trading strategy.
  2. When the fundamentals or the technicals change - get out of the position.
The unfortunate thing for me is that I recommended both of these stocks as potential longs in my first blog post on feb 1 when the Egypt turmoil first began. But obviously I was a little early on that one...

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