David writes:

Do you have any comments on True Religion at this point? I have been impressed that in spite to the continuing naked short position, the stock price has been flat since the initial lashing that took place. With the obvious head and shoulders technical formation of the stock last year there are usually a second leg down.

Fundamentally, the comany has not released any info, and now that they are a retailer, I thought we might at least see some retail figures that are normal for the industry.

I have kept my eye on TRLG. I'm still waiting. I do have my speculative call options for April, but as far as re-entering into the company, I'm waiting. My main reason is because I'm not very optimistic on the economy at this point, and while I understand that generally luxury brands and retailers are the last to be hurt, they could be hurt. And if sales could be hurt, we could see lower valuations at some point.

While I'm still in the learning process with regards to technical analysis, it does seem to have support in the $15 area. I think fundamentally speaking though, the company is in a much better position than it was back in November. You can buy the company for almost the same price you could have back in November after the conference call, only you already have an extra 2 or 3 stores that are secured for rollout, and you are investing in a company that has been generating strong cash flows.

I still do like the company. But I'm going to wait until after I see Q4 numbers. If they are disappointing, we could see movement to the downside, and which point I would consider re-opening a position in the company.

On a positive note, one of the institutions with a large holding has increased its stake in the company. Finally some insider buying as opposed to selling.