Thursday, October 21, 2010

Idea for a short trade...

CRUS has clearly been under distribution for the past four months. The $15.00 level which was previously resistance for this stock has now become a major support level and neck line for a four month head and shoulders pattern. This pattern is very clean and clear and comes after a massive run up in this former leader.


CRUS is set to report earnings this morning before the open. If they disappoint and/or guide lower and the market responds by gapping this stock or selling it down hard on volume then this would be a good entry for a short trade to hold until there is an extreme reading in the T2108 breadth indicator.

Good luck if you trade this!

(This is not a sell short recommendation and you should do your own research as well as protect your portfolio by using risk management with stops or hedging with options.)

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