Short City: Aeropostale, Burger King

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Every market is a two-sided market, and while the typical investor makes money during bullish phases, experienced investors know how to make money during bearish phases, as well. In fact, many experienced and institutional traders make more money shorting stocks than by going long.

Short these shares if you can tolerate high-risk and are an experienced investor that does not remove Buy / Stop Losses.


Aeropostale (NYSE: ARO). Combine a large mall presence, with a cluttered sector (young-teenager casual apparel, accessories), with the 'frugal consumer' era, and you get: down goes the stock. Cover Short on a bounce off $25, $20, $15 or $12.50. Buy / Stop Loss if you were to sell shares in this company: $42.

Burger King (NYSE: BKC). Burger King still expects to open 350-400 new stores in F2009 despite an 11,750-store presence and sluggish sales, and amid challenging (at best) eatery conditions. The U.S. / Canada performance (7,500 stores) will not shine in F2009, hence if the emerging markets do not come to the rescue, BKC will move much lower. Also, technically, the stock looks like a bear hug. Cover Short on a bounce off $15.50, $15, $10 or $5. Buy / Stop Loss if you were to sell shares in this company: $23.


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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

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Last updated: February 10, 2010: 05:12 AM

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