• BXS - Oct 16 201420141016
  • CVX - Jan 13 201420140113
  • GMCR - Dec 01 201420141201
  • HIBB - Sep 08 201420140908
  • HMN - Apr 11 201420140411
  • HSY - Jul 21 201420140721
  • ILMN - Dec 02 201420141202
  • KBE - Jul 21 201420140721
  • KRE - Jul 31 201420140731
  • TSLA - Sep 23 201420140923
  • XHB - May 06 201420140506


Active Trades – Short

Active Trades are trade ideas that were previously posted as Trade Setups and have since triggered an entry or occasionally, a trade idea that was first posted directly to the active trades category as offering an objective entry at the time of the initial post. Active Trades might also be listed in one or more of the other trade categories as these categories are not necessarily mutually exclusive. E.g.- An Active Trade that still offers an objective entry might also be categorized under the Trade Setups category. Likewise, an Active Trade with multiple prices targets may have already hit one or more of those initial targets with additional target(s) remaining, thereby falling under both the Active Trades and Completed Categories. Traders should look to make any new entries or add to existing Active Trades objectively, such as a on pullback to a support level during an uptrend or a re-test of a broken trend-line, wedge, or channel pattern.

Dec 022014
 

ILMN (Illumina Inc) offers an aggressive short entry while near the top of this large rising wedge pattern with a more conservative/conventional entry or add-on to come on a break below the bottom of the wedge. Suggested stops based on a 3:1 R/R to one’s preferred target(s). Barring a large gap down, ILMN will be added as an Active Long Trade at the open tomorrow.

The large rising wedge pattern on the daily (first) chart below can also been viewed on the weekly (second) chart along with the percentage drops that followed all other similar weekly divergent tops over the last decade (39-68% corrections). Two of those three previous corrections bear markets in ILMN occurred while the US broad markets were solidly entrenched in bull markets (2006 & 2011), highlighting the fact that money can be made shorting the right stocks at the right time in a bull market. My plan for this trade is to take a fractional position here near the top of the pattern, adding to the position if & when prices break below the bottom of the wedge although I may also decide to cover my position on the initial tag of the uptrend line (then shorting a full position on a break below the pattern).

Of course the markets are dynamic and as such, so are my trading plans. T2 at 136.10, which is set just above the 134 horizontal, is the current preferred swing target at this time. Should prices ultimately make a solid break below the 127 support level (not drawn on this chart), especially if the broad market were to be in a confirmed downtrend at the time, the chances would be good for a back-fill of the thin zone that runs from 134 down to the 86 level.

Dec 012014
 
GMCR daily Dec 1st

GMCR daily Dec 1st

GMCR (Keurig Green Mountain Inc) offers an objective short entry here around the 140 level following the recent long-term uptrend line break & the more recent bear-flagging price action. T3 is both the current preferred & final target at this time. Suggested stop over 155 or lower (if only targeting T1 or T2).

GMCR was added as a short trade setup on Sept 25th with an pending entry based on a break below the 125.35 level. The stock has remained above that level since then but just recently went on to breakdown below the 2+ year primary uptrend line and has set up in what appears to be a bear flag pattern over the last several trading session. With the GMCR appearing to break down from that flag pattern (best viewed on the 60 minute time frame) by moving impulsive lower today, the stock offers an objective short entry around current levels. Please note that the price targets have been modified since the previous short entry was posted a couple of months ago. Updated daily chart shown.

Click here to view the live, annotated daily chart of GMCR.

Oct 162014
 
BXS daily Oct 15th

BXS daily Oct 15th

The BXS short trade hit the second target, T2 at 19.33, yesterday for a profit of 18.1% since the original short entry. Consider booking full profits and/or raising stops, depending on your trading plan. T3 at 18.30 remains the final target for now but as always, reactions off the initial tag of each target level are likely.

Sep 232014
 
TSLA daily Sept 23rd

TSLA daily Sept 23rd

My notes & thoughts on TSLA virtually mirror the previous short trade on TSLA, just over a year ago today (which, fortunately, was the only other time I shorted this beast of a stock). TSLA was added as a short entry back then on Sept 13th, 2013 at 162.55 and went on to hit the top of the target zone for a 17.2% gain less than 2 months later and continued on to the bottom of the target zone for a 22% gain before reversing & continuing the bubble uptrend in the automaker.

The basis for this short trade, as back then, is the fact that TSLA has just recently broken down from a very large bearish rising wedge pattern, complete with bearish divergences on both the MACD & RSI. Also compare the short interest chart on this current daily chart with the short interest chart on the original daily chart from that previous post (click on the blue hyperlink above to open in a new window). As back then, the precipitous drop in short interest was undoubtedly a large driver in the sharp price increase in TSLA since the July 2013 lows as the short interest peak shortly after that and has continue to fall roughly inline with rise in the stock price.

As with that previous short trade, I have a target or support zone that I’m targeting on the stock although my current preference at this time is to cover just above the top of the zone, assuming that this trade pans out. Therefore, the sole & final target at this time T1 at 206.20. With TSLA currently backtesting the wedge from below following yesterday’s breakdown, the stock is offering a very objective short entry with a suggested stop over 265 (a 3:1 R/R) or lower.

Sep 232014
 
BXS daily Sept 23rd

BXS daily Sept 23rd

As mentioned yesterday, I plan to update the trade ideas this week & hope to remove all the trades that have either exceeded their suggested stop levels or no longer look compelling from an R/R or technical perspective. My intention is to have all trade ideas updated by tomorrow. However, as I’m seeing increasing evidence that a long overdue significant correction in US equities may be close at hand, I am going to turn my immediate focus on highlighting some of the current trade ideas that still look compelling at this time, starting with BXS (Bancorpsouth Inc).

The live chart to the BXS Active Short Trade was updated along with several other Active Trade Ideas last week. BXS has just recently turned lower after back-testing the neckline of the Head & Shoulders pattern that is still very much in play. BXS was added as a Short Setup back on July 17th & went on to trigger an entry later that day. This trade hit the first price target (T1 at 20.54) for a 12.8% gain on Aug 1st with the typical reaction (bounce or consolidation) from there, which resulted in the recent backtest of the neckline. As BXS is still within close proximity to the neckline, this trade still offers an objective entry or add-on to an existing position with a stop on a solid close above the neckline. As T1 has already been hit, followed by the expected reaction off that level, my expectation would be that the upon the next drop to the T1 level would provide little, if any support with T2 (19.33) as the most likely stopping point for the next move down in the stock.

In addition to prices rolling over following the failed attempt to regain & close above the neckline of the Head & Shoulders pattern, note the bearish posture of the MACD. The MACD line (fast line) is starting to turn lower (i.e.- a bearish crossover is pending… also easily referenced via the MACD histogram) after making an extended run up to the zero line. The zero line on the MACD often acts as support & resistance and that has been the case with BXS, with the stock price in an uptrend when the MACD is above the zero line & a downtrend when below.

click here to view the live, annotated daily chart of BXS

Sep 082014
 

HIBB daily Sept 8thThe HIBB (Hibbett Sports Inc) short trade hit the first target today for a 13% gain. HIBB came within 3 cents of hitting the first target, T1 at 43.48, exactly one month ago today before making a failed attempt to backfill the large gap and although it took a bit longer than I had expected, the first target was finally reached today. Consider booking partial or full profits and/or lowering stops, depending on your trading plan. T2 (40.35) remains the final target.

click here to view the live, annotated chart of HIBB

Note: New trade ideas and market updated have been far & few between lately. This is a reflection of both my own trading activity, or more accurately the lack thereof, as well as the fact that I’m just not finding many very attractive long setups with solid R/R profile. Although I do have a considerable watchlist of short trade ideas, the current uptrend in the broad market without any clear short-term bearish pattern formations dampens the R/R on even the best looking short patterns. I’m waiting for some half-decent signs of a likely reverse or even a short-term sell signal in the broad markets before taking on any more short exposure although I may take a shot at an APPL short, should I fail to be impressed with their latest product announcements tomorrow as a bearish technical case for the stock has recently been outlined.

Aug 082014
 
HIBB daily Aug 8th

HIBB daily Aug 8th

HIBB (Hibbett Sports Inc) gapped down 12.5% at the open today and came within a mere 3 cents of the first profit target, T1 at 43.48. Chances are that target will be hit next week so consider booking partial or full profits and/or lowering stops, depending on your trading plan. T2 remains the final target

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