• ALK - Jul 24 201420140724
  • AON - Jul 25 201420140725
  • AXP - Jul 25 201420140725
  • BXS - Jul 22 201420140722
  • FISV - Jul 23 201420140723
  • FRC - Jul 31 201420140731
  • HAIN - Jul 21 201420140721
  • HIBB - Jul 25 201420140725
  • HSY - Jul 21 201420140721
  • KATE - Jul 29 201420140729
  • KBE - Jul 21 201420140721
  • KIE - Jul 31 201420140731
  • KRE - Jul 31 201420140731
  • PACW - Jul 17 201420140717
  • PNC - Jul 17 201420140717
  • SAVE - Jul 24 201420140724

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.

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 »

Jul 312014
FRC daily July 31st

FRC daily July 31st

FRC (First Republic Bank) offers an objective short entry here around current levels (46.88ish) as it sits just below resistance on the daily chart. FRC was discussed in this post a couple of weeks ago as it was one of numerous regional banks on my watchlist that fell too much, too fast following my price alert in order to post an objective short entry before I could get the chart marked up, uploaded and compose a post with notes & details on the trade. I did go ahead and added FRC as a Short Trade Setup and I have been monitoring the stock closely, waiting for the near-term overbought conditions as a result of that one-day post-earnings plunge to moderate, which they have.

I was also waiting to see if FRC would regain what was my first target (former support, now resistance) level, which so far, the stock has failed to accomplish after several attempts over the last week or so. As such, I’ve decided to establish a short position in FRC with a suggested stop above 48.10, which is slightly above the former first target, now R1 (resistance) level. This relatively tight stop (in relation to the two price targets, T1 & T2) give this trade an attractive R/R or nearly 4:1 to the first target and better than 5:1 if targeting T2 (the final target).

Remember, many of the Active Short Trades are in the regional banking sector. Just as with long-term investing, proper diversification amongst positions when actively trading is extremely important in the mitigation of risk due to the potential over-exposure to any one sector.

click here to view the live chart of FRC

Jul 312014

The KRE (Regional Bank ETF) Active Short Trade & Short Setup has been consolidating over the last week or so in what appears to be a bear flag continuation pattern. If/when prices break below the pattern, we are likely to see a relatively swift move down towards the neckline of the aforementioned Head & Shoulders topping pattern on KRE.   click here to view the live, updated chart of KRE

KRE daily July 31st

KRE daily July 31st

On a related note, I had recently mentioned my observation of several increasing bearish developments within many of the key components of the XLF (Financial Sector ETF). I find it a bit less than coincidental that these bearish developments are coming at a time when Argentina has decided to default on their debt as well as the recent implosion of the Portugese mega-bank Banco Espirito SantoFunny how quick the mainstream & Wall Street pundits are quick to dismiss these as isolated events, likely to not have any spillover into the rest of the financial markets…. all very late 2007-esque IMO. Regardless of whether these incidents prove to be isolated, contained events without any spillover or ripple-effects into the financial system (hint, hint… keep an eye on junk bonds ‘JNK’ and credit spreads), here’s the updated chart of XLF with a key support level to watch and some downside targets for if/when prices break below that level.     click here to view the live, annotated chart of XLF

XLF daily July 31st

XLF daily July 31st

Jul 292014
KATE daily July 29th

KATE daily July 29th

KATE (Kate Spade & Co.) will trigger a short entry on the open tomorrow unless the stock opens above 38.90. T2 is my preferred swing target at this time. Stops should be based upon one’s preferred target although a relatively tight stop can be placed above 41.10.

Note: KATE is scheduled to report earnings on Aug 14th. Also note that I had mocked up this chart shortly after 3pm ET with the intention sending out the setup well before the close. However, I decided to add the following market commentary & charts below which took quite a while put together. Hence, my original entry criteria was met by the close today but will have to be changed to the open tomorrow as per the comments above.     Click here to view the live, annotated daily chart of KATE

On a related note, on KATE as well as several of the recent new trade setups, I have included the upcoming earnings release dates (if scheduled in the near-future) as we are still in the midst of earnings season. In last week’s post titled Earnings: To Hold or Fold?” I had discussed how each trader must make the decision whether or not to Continue reading »

Jul 292014

LYV (Live Nation Entertainment) will trigger a short entry on a break below the daily uptrend line. In addition to the divergent high in place on the daily time frame, LYV is also challenging its all-time highs while the RSI is also turning lower following a divergent high that was put in at extreme overbought levels. Stops TBD upon entry.  Note: LYV is scheduled to report earnings this Thursday, July 31st, after the market close.    Click here to view the live, annotated daily chart of LYV

Jul 252014

HIBB (Hibbett Sports Inc) will trigger a short entry on any intraday break below 49.96. An alternative, more conservative entry would be to wait for a close below 50.00 (shorting just before the 4pm market close if the stock is poised to close below that level). Suggested stop above 53 (or lower, if only targeting T1). Although the actually support level comes in right about 50.00, my preference is to give it a buffer of about 4-5 cents below that level to avoid a premature entry, should we get a brief intraday break below support that proves to be a whipsaw signal.

Typically when a stock falls to a well-defined support level, such as this, there are two ways to view a trading opportunity. Those bullish on the stock, believing that the stock will likely reverse trend and make a lasting bounce off that support level will obvious look to position long on or near the tag off support with a stop-loss order placed somewhat below. Those who believe the support level is likely to give way in the near-future will look to position short on a break below support with a stop somewhat above, in case the breakdown proves to be a bear-trap or whipsaw signal.

Some of the factors for my preference to view HIBB as a potential short candidate vs. a long-side trading opportunity on the next tag of the 50 level is based on my interpretation of the recent price action on both the daily & weekly charts. Note the large divergences between the stock price and the OBV (On Balance Volume) leading up tot he  recent all-time highs in HIBB (daily chart) in addition to the impulsive selling following the late December breakout to new all-time highs (typically a bullish event but bearish when the breakout fails shortly afterwards on impulsive selling). On the weekly chart we can see that HIBB fell below its bull market uptrend line back in mid-August, going on to make a successful backtest of the trendline upon that failed breakout to new highs in late December. The negative divergences in place when the highs were put in during the failed breakout in December helps add to the longer-term bearish case in the stock.

Click here to view the live, annotated daily chart of HIBB