Sunday, October 3, 2010

Update on short set ups...

For all the shorts I suggest, I recommend waiting till price appears poised to close below the suggested entry level before putting on the short position and for the markets to also break down below the previous week's low on higher volume than the previous day and appear likely to close their with the T 2108 falling dramatically below 80. This goes for all the shorts because the markets are still in an uptrend and essentially one is trying to catch an intermediate turn in the markets. So having these factors on ones side will increase the odds of success.

SANM is still shortable with the same suggested entry, stop loss and target prices as last post; $11.50, $12.50 and $8.50 respectively.

CREE
is now a do nothing because the stop loss and entry price are too far apart. Wait for a set up that offers better risk/reward and higher probability of a target 3X risk getting hit.

SNDK is the same as CREE.

ISRG already triggered this week. So ISRG has already shifted into an intermediate term down trend ahead of the markets. If one is aggressive, one can short a bear flag, bearish pennant or wedge prior to the markets confirming a trend change or more conservative traders can wait for confirmation before shorting with the same patterns.

KIRK
is still shortable with the same suggested entry, stop loss and target prices as last post; $13.45, $14.20 and $11.00 respectively.

RUE is still
shortable with the same suggested entry and target prices as last post; $24.30 and $19.20 but slightly different stop loss of $26.25 instead of $26.00

VPRT
is still shortable with the same suggested entry, stop loss and target prices as last post; $36.60, $39.15 and $28.95 respectively.

The markets may still be a few weeks away from a top here but weak stocks usually break down well in advance of a correction if there is one. If there is'nt a correction it is unlikely that one will be triggered on these shorts if the above rules are followed and even if triggered into a few it may still work because of the fundamental weakness in the stock or you just get stopped out for a quick small loss.

Either ways shorting weak stocks now is a high probability trade and one I will repeat every time I get the current conditions because I know in the long run these trades will make money!

Good luck and good trading!





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