Selling into Rallies

The DJIA is up triple digits two days in a row and 3 out of the last 4 days. I am using this opportunity to sell some stocks and increase my short exposure. I just feel that the market needs one strong leg down before I can start buying long positions again.

So I have made my shopping list, which includes TAO, GAF, KOL and TKF, along with Fording Canadian Coal (FDG). I am also hoping Home Depot (HD) pulls back to $25 and Disney (DIS) to under $30 so I can start picking them up.

Home Builders have also put in a bottom and at any sign of weakness, I will look to buy Toll Brothers (TOL) and MDC Holdings (MDC).

Why do I want to buy TAO, GAF and TKF? Because the chinese real estate market is hot and second tier emerging markets in Africa and Asia present a better opportunity than the original BRIC nations. KOL and FDG - because coal is on fire and demand is increasing. FDG also has a 5% dividend to boot. HD and DIS - because they present great long-term value and are cheap!

-- Faisal Laljee
Full Disclosure: I do not own any of the stocks or ETFs above but my position can change anytime without notice.

Related Stories:

• Build Your Defense
• Fancy ETFs for all Appetites
• Housing Still in a Rut but Home Builders Near a Bottom