Posts Tagged ‘short swc’

PAL and SWC are Good Short Plays

By: ispeculatornew | Date posted: 03.07.2008 (12:27 am)

SWC – Stillwater Mining Co. (NYSE) – (Closing Price – $18.37)

The prices of palladium and platinum recently spiked to all time highs due to power disturbances that resulted in rolling blackouts in South Africa. Speculators seized on this news to bid up palladium and platinum prices to ridiculous levels.

The stock prices of North American Palladium (PAL) and Stillwater Mining Co. (SWC) spiked in tandem with palladium and platinum prices and both companies present good shorting opportunities.

The stock price of PAL more than doubled earlier this year and SWC tripled. Obviously, speculators sent these stocks up to unsustainable prices and I think they will quickly drop back down.

The price of palladium has been dropping quickly and I expect platinum to drop quite a bit from its record levels. The concern over supply due to power distruptions in South Africa has eased and the momentum has dried up. I expect the stock prices of both of these companies to see significant declines.

You can pick either stock to short but I am going to give a recommendation to short SWC at today’s closing price.

Disclaimer: I have no position in PAL or SWC.