Wednesday, May 12, 2010

Bear Flags all over the place!!!

These are three of the best looking bear flags on my watchlist. MSTR and RDWR are earnings torpedo plays while CGA is a play on the sector weakness in Chinese stocks. I will be looking for RDWR to stall out and reverse at its 50 day MA and for MSTR and CGA to stall at over head resistance. Then I will look to get short of these stocks on breaks of the lows of the previous day.
CGA and MSTR are higher probability plays as they are below their 200 day MA while RDWR is still above. In addition, MSTR has already had two earnings disappointments and CGA's sister stocks are all in long term down trends (i.e. below their 200 day MA) and have had recent earnings disappoints after a series of earnings acceleration.
So shorting bear flags after this over sold bounce in the markets will be my focus for this week.
Good luck and good trading!

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