• AA - Sep 15 201420140915
  • AON - Jul 25 201420140725
  • AXP - Jul 25 201420140725
  • BXS - Jul 22 201420140722
  • FFIN - Aug 14 201420140814
  • FRC - Jul 31 201420140731
  • GMCR - Aug 08 201420140808
  • HSY - Jul 21 201420140721
  • KBE - Jul 21 201420140721
  • KIE - Jul 31 201420140731
  • KRE - Jul 31 201420140731
  • LYV - Jul 29 201420140729
  • PACW - Jul 17 201420140717
  • PNC - Jul 17 201420140717
  • SAVE - Jul 24 201420140724
  • WAB - Sep 15 201420140915


Short Setups

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.

Sep 152014
 

WAB daily (4 yr) Sept 15thWAB (Wabtec Corp, aka Westinghouse Air Brake Technologies Corp) will trigger a short entry on a break below 81.50. With an expectation for a minor reaction following the initial tag of the S1 support zone, that level could provide an early target for active traders. Otherwise, T1 at 70.20 is the sole profit target on WAB should a short entry trigger soon.

Sep 152014
 

AA (Alcoa Inc.) will be added directly as an Active Short Trade here around the 16.62 level following the breakdown of this very steep, nearly 12 month old uptrend line. Targets are shown as T1 & T2 on this daily chart and the exact suggested buy-to-cover levels & stops will follow soon. To add to the case for a reversal in the steep advance in AA over the last year would be the fact that the Dow Jones US Aluminum Index ($DJUSAL) has run into the bottom of a significant long-term resistance zone while at rarely seen overbought levels that have historically preceded major tops in aluminum prices.

Aug 142014
 

FFIN (First Financial Bankshares) is just one more in a long list of attractive short candidates in the regional banking sector. In fact, the chart pattern on FFIN looks very similar to the HIBB Active Short Trade with a similar topping pattern above a well-defined support shelf with a substantial thin zone below which is likely to be filled quickly once/if prices break support (as they did on HIBB).  FFIN will trigger a short entry below the 28.25 horizontal support level with a suggested stop above 29.10. The sole profit target at this time is 24.84, which would provide a 12% gain if hit, although this trade has the potential to morph into a much longer-term swing short trade with an ultimate downside target around the 18.70 level, depending on how both FFIN & the broad markets trade going forward.

 

I’ve included a 2-year, daily chart as well as a 4-year, 2-day period chart from TC2000 along with both the normal (adjusted) and unadjusted 2-year daily charts from stockcharts.com to help illustrate the shortcomings of the stockcharts.com charting platform. Stockcharts.com uses a default of plotting all historical stock prices adjusted for dividend payments instead of using the actual levels where trades took place in the past. The result is an inaccurate representation of historical prices when viewing the charts of dividend paying stocks. These distortions become more pronounced the longer the time period viewed and/or the higher the yield (past dividend payments) on the stock or ETF that you are viewing. The go-around solution for this issue is to add an underscore (“_”) before the ticker symbol which will render a chart showing the “unadjusted” price history of the security. This works fine unless the stock has split during the time period you are viewing as stockcharts does not “unadjust” for the change in price following the stock split.

TC2000, along with the free version, freestockcharts.com, by default will show stock price history that is unadjusted for dividend payments but adjusted for stock splits, which results in a true picture of the past trading history of the security… which is the basis for technical analysis & essential when trading IMO. FFIV is a good example of that difference as the TC2000 chart shows an extremely well-defined horizontal support level with numerous reactions while the default stockcharts.com chart shows a slightly up-sloping (dashed) support line over the same period of time. There are several reasons that I subscribe to both charting services with one of those reasons is the ability to provide users of Right Side of the Chart links to the live, annotated charts, a feature that stockcharts.com provides while TC2000 does not. Each of these charting platforms has their own pros and cons but when trading and especially setting trendline alerts, I will use TC2000 along with several other streaming real-time platforms from some of the various brokers that I use.

Aug 082014
 
GMCR daily Aug 8th

GMCR daily Aug 8th

The secondary, more conservative entry criteria for the GMCR (Keurig Green Mountain Inc) short trade setup posted earlier today was incorrectly stated as 107.40 instead of the actual resistance level of 110.73. The official & preferred entry criteria remains on any move below 112.00 with a secondary, more conservative entry or add-on to be triggered on any move below 110.73 which is the bottom of the May 12th/13th gap. The notes and chart from the previous post have been edited to reflect this correction.

Aug 082014
 
GMCR daily Aug 8th

GMCR daily Aug 8th

GMCR (Keurig Green Mountain Inc) will offer an objective short entry on a break below this primary uptrend. Note the bearish rising wedge pattern with strong bearish divergences that has formed between the previous reaction high back in February to the most recent marginal new all-time high in the stock about a month ago. Since that recent new high, GMCR has rolled over, failing to build on the gains or even sustain the breakout to new highs (bearish) and will likely break below that primary uptrend line soon.

The official entry will be on any move below 112 with a more conservative entry or add-on below the 110.73 minor support level. The suggested stop for those targeting T1 would be 119.15 with a suggested stop over 121.25 if targeting T2 (the final target which would be good for a 25% profit if hit).    click here to view the live, annotated chart of GMCR

Aug 012014
 
AXP daily Aug 1st

AXP daily Aug 1st

AXP (American Express Co) hit the first target, T1 at 85.85, for a quick 6.6% gain from the short entry a week ago today when the stock crossed below the 91.95 entry trigger. In the previous post, I had stated T2 (84.10) as my preferred target although I very well may decide to ride the full position down to at least T3, the current final target at 78.67, depending on how AXP, the rest of the financial sector, and the broad markets trade going forward.

click here to view the live, annotated chart of AXP

Jul 312014
 
KIE daily July 31st

KIE daily July 31st

In this post on June 21st, I had stated that “the popular XLF (Financial Sector ETF) is also on my radar as one of the more promising swing-short candidates. I haven’t pulled the trigger yet but there are several large financial companies, in fact many of the largest components of the XLF, including banks, credit card companies, insurance companies, & even the almighty BRK-B (Berkshire Hathaway cl.B) that although not ready yet, may be setting up as potentially lucrative swing-short trades.”

Although the KBW Insurance Index is “only” down about 4 1/2 % in the eight trading sessions since then, in reviewing the charts this evening I continue to reiterate my belief that the financials, including the insurance industry, look to offer some of the most attractive swing short opportunities that I’ve seen in a long while. I’ve only made it about a third of the way through reviewing all of the components of KIE (SPDRs KBW Insurance ETF) tonight but I am truly impressed by not only the quality, but also the sheer quantity of short setups with attractive R/R profiles in addition to relatively large profit potential.

There are so many promising trade ideas that it will take some time to finish reviewing all of the charts in the sector and then culling the list for the most promising short candidates, Continue reading »