The original short entry on GS (Goldman Sachs Group) was posted on Sept 24th while GS was backtesting the recently broken large bearish rising wedge pattern (orange) as show in the first (previous) chart below. Note how GS has been stair-stepping higher with the white minor uptrend lines with clearly diminishing momentum on each new minor uptrend. The next short entry or add-on will come on a break below this most recent uptrend line. Click here to view the live, annotated chart of GS.
Stocks in a bearish pattern formation that are poised to break-down and provide an objective short entry. Also included in this category are stocks that may have already triggered a short entry but still offer an objective entry or add-on to the position at or near current levels such as a bounce back to a key resistance level.
CME will trigger a short entry on a break below 77.10 which is both the primary uptrend line as well as the bottom of the support zone. Click here to view the live chart.
AMTD will trigger a short entry on a break below this bearish rising wedge patter. Stops will depend on one’s entry price and preferred target level(s). Click here to view the live chart.
There are a numerous attractive short setups forming in the investment brokerage sector. ETFC (E-Trade Financial Corp) will trigger a short entry on a break or daily close (for those preferring additional confirmation in order to reduce the odds of shorting a false breakdown). ETFC does have the potential for a longer-term swing short trade if we get a bearish cross of the 20 ema below the 50 ema. By my best guesstimation, I would say that bearish trend change signal would come around the time prices move down to the T1 area (in which case I would likely hold out for T3). Targets levels are shown on this chart with the exact suggested buy-to-cover levels to follow. Stops to be determined upon entry. Static daily chart shown or click here to view the live, annotated chart.
HON will be added as an Active Short Trade here on this break below this large bearish rising wedge pattern. Targets are marked on this daily chart with the exact suggest target levels to follow. A suggested stop on a move above 89.60 (just above the recent highs) offers a R/R of about 3:1 to my current preferred target of the T2 zone (76.30-75.40). As always, stops should be set commensurate with one’s own risk tolerance, trading style and preferred profit target.
On an administrative note: I’m noticing quite a few potentially significant technical developments today (obviously bearish). As the frequency of chart & commentary postings will likely increase this week, the automatic email notifications feature will be suppressed for some of the non-time sensitive posts (email notifications on actionable trade ideas such as this will continue to be sent immediately upon publication). The new feature to opt in or out of notifications on specific categories should also be available by the end of this week as well. As such, those signed up to receive email notifications may want to periodically check the site for new updates in which notifications may not have been sent out.
CSIQ (Canadian Solar Inc) will trigger a short entry on a break below this rising wedge pattern. T2 is the current final & preferred target although this trade could be extended to T3 at 10.85, depending on how the charts of CSIQ, TAN (solar sector etf) and the broad markets develop going forward.
I also plan to put together a video covering the solar stocks today and possibly some additional videos or written commentaries (with static charts) on the coal sector and growth & income trade ideas, specifically the mREITs (mortgage REITs), some of which still look promising from a longer-term perspective. My commentary on the broad markets remains light as there really haven’t been any new developments lately. The US equity markets continue to make a slow-grind higher despite bearish divergences and extreme sentiment readings that continue to build although most key European markets have recently started moving sharply lower at key technical junctures. Several of those charts can be viewed on the Live Chart Links page.
ORLY (O’Reilly Automotive Inc) looks like an objective short following yesterday’s breakdown below this yellow support line which also follows the recent breakdown below the white ascending price channel (complete with negative divergences in place at the recent highs). My first price target will be the primary uptrend line, which can be viewed on the 5-year daily chart below. T2 at 107.94, is placed just above the green horizontal support level (to help assure a fill). With all but the shortest-term trend indicators still on buy signals, I’d have to favor T1 at this time. However, the bearish divergences & extreme sentiment readings that have persisted from months are still in place and have only grown to even larger, potentially more bearish extremes. As such, my preferred target my very likely be extended to T2 should we begin to see some half-decent evidence that a correction in the broad markets is likely underway. Note: The static charts below were made before the market opened today. Click here to view the live 2-year daily chart of ORLY.
PRAA has recently broken below a textbook bearish rising wedge pattern, complete with negative divergences in place at the recent highs. Following the breakdown, PRAA (Portfolio Recovery Associates) made a backtest of the pattern from below and has since began moving impulsively lower, giving additional validation to the pattern. Although a reaction off the support zone (52.35-53.00) is likely, PRAA looks to offer an objective initial short entry here, bringing to a full position on a break below support. As such, PRAA will be added as an Active Short Trade at current levels. Stops should be commensurate with one’s preferred target (shown on this daily chart). The live, annotated chart can also be viewed by clicking here.
F (Ford Motor Co) could be shorted here following the recent breakdown below the bearish rising wedge pattern and will be added as an Active Short Trade. As prices currently sit just above support around the 16.55 area, one could also wait for a solid break below that level before initiating or adding to a short position. As of now, my sole profit target for this trade is 14.42 although one could also take full or partial profits at the top of the S2 (second support) level which comes in around 15.85-15.71. Daily chart shown here or click here to view the live chart.
The SBUX (Starbucks Corp) short setup has triggered an entry on a break below the pattern. The previous notes & charts from Nov 25th can be viewed by clicking here. Updated 20 month chart, including suggested profit targets shown below. Suggested stop over 82.55. click here to view the live chart.