Thursday, May 13, 2010

One new short position...

I shorted 75 shares of MSTR this afternoon @ $77.69 as it broke below intraday support around $77.70. I was also stalking RDWR for a short entry, however, unlike MSTR it did not break down and so I did not enter it short.

I have my stop loss order on the MSTR position at $79.00 and I am risking $108.25 including commissions on this trade. My target is $73.80 which is well above the $66.00 - $68.oo pivot low formed last week. Thus this trade has the potential to yield profits in excess of 4 R's. These are the types of trades I like.

There are alot of other interesting short set ups after todays reversal day. RDWR mentioned previously is one of them and there are also: GMCR; JST; SMCI and RINO. All of these stocks are in clear intermediate term down trends after recent earnings disappointments and are now pulling back to their respective 20 day and/or 50 day MA's. With the market indexes short term over bought these stocks currently offer excellent risk/reward and a high probability of moving down significantly over the next 3 - 5 days.

Good luck and good trading!

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