• ALK - Oct 01 201420141001
  • FFIN - Aug 14 201420140814
  • FISV - Oct 13 201420141013
  • FRC - Oct 13 201420141013
  • GMCR - Sep 25 201420140925
  • HSY - Jul 21 201420140721
  • KBE - Jul 21 201420140721
  • KIE - Jul 31 201420140731
  • KRE - Jul 31 201420140731
  • LYV - Jul 29 201420140729
  • OZRK - Sep 23 201420140923
  • PACW - Jul 17 201420140717
  • $RUT-IWM - Oct 17 201420141017
  • $SPX-SPY - Sep 25 201420140925
  • TSLA - Sep 23 201420140923
  • 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.

Oct 172014
 
IWM 120 min Oct 17th

IWM 120 min Oct 17th

Here are a few suggested stop levels for the IWM short trade. The first stop would be just above that shaded box which encompasses the 109.80 horizontal resistance as well as a Fib cluster, the 38.2% & 50% retracement levels of the two prior reaction highs. The next stop, stop 2 at 112.42 lies just above the 112.20 horizontal resistance and another tight Fib cluster (50% & 61.8%) with the upper-most suggested stop above 144.55, which comes in around the 61.8% retracement of the move down from the July 1st peak in the $RUT/IWM. Which stop(s) one uses would be based on their preferred downside target(s) in the $RUT/IWM (i.e.- the lower your price target, the higher your stop).

I had mocked up a daily chart of IWM with some potential target areas last night but either inadvertently saved it to the wrong watch-list or didn’t save it at all. If I can’t find it I’ll work up another chart today but as of now, based on my interpretation of the weekly chart, I think a move down to the 875 level on the $RUT (about a 20% drop from current levels) is certainly a possibility in the coming months at this time. Of course, if that proves to be the case, we would almost certainly experience some very quick counter-trend rallies along the way.

Oct 162014
 
$RUT daily Oct 16th

$RUT daily Oct 16th

Yesterday, the $RUT (Russell 2000 Small Cap Index) hit the second downside target (T2 at 1040) that has been listed on the daily chart under the Live Charts page for months now. As if most often the case, the typical reaction (bounce and/or consolidation) immediately ensued. That bounce is now approaching the base of the double-top pattern that I’ve also been highlighting on that same chart for months now as well. In fact, the base of that double-top patten was the first downside target which was just recent hit & then taken out a few sessions later, triggering a breakdown of that pattern which actually projects down to the 960 area, a drop of about 11% from current levels if reached.

With the bottom of that double-top pattern at the 1080-1082 level & the $RUT trading at 1081 as I type, a short entry here on the $RUT (IWM) with the appropriate stops somewhat would have to be consider a very objective entry with a very favorable R/R (risk-to-reward ratio. As such, IWM will be added as an Active Short Trade here around the 107.50 level.

I will follow up with the specific IWM targets soon but just wanted to get this trade idea out asap in case we do get the expected reversal off of this backtest of the 1080-1082ish resistance level. For those preferring to use one of the leveraged ETFs as a proxy for an $RUT short (TWM, TZA, etc…), keep in mind that this trade is intended as a multi-week swing trade and therefore, at most I would consider using TWM (2x short $RUT) as the decay on the leveraged ETFs, especially the 3x like TZA, will almost certain impact the returns if held for more than just a few days.

The live, annotated version of the $RUT daily chart can be accessed via the Live Chart Page or the Live Charts Links widget box on the right-hand sidebar of the home page.

Oct 132014
 

The previously posted FISV (Fiserv Inc) short trade setup broke down below the daily uptrend line last Tuesday & went on to print a weekly close below the ascending price channel on the weekly chart last week, a more powerful, longer-term sell signal. With prices still in close proximity to the breakdown, this trade still has plenty of meat on the bone & still offers an objective short entry around current levels. I’ve added one additional price target at 59.34 (actual support around 59.30) & have re-sequenced the previous two targets as T2 & T3. Suggested stops would be based on a 3:1 R/R to one’s preferred targets or slightly above the recent highs if targeting the final target, T3 at 47.77.

click here to view the daily chart of FISV       click here to view the weekly chart of FISV

Oct 132014
 
FRC daily Oct 13th

FRC daily Oct 13th

FRC (First Republic Back) was added as an Active Short Trade back on July 31 at a price of 46.88 with a relatively tight suggested stop of 48.10. The stock bounce a little further than I had anticipated (in sympathy with the broad market) and went on to slightly exceed that suggest stop level for a relatively minor loss of 2.6%. Therefore, that previous trade on FRC will be considered stopped out for a loss and that previous short-entry post will be re-assigned to the Completed Trades category where it will be archived indefinitely for future reference.

FRC will also be added directly as a new Active Short Trade here around the 47.42 on this break below the bear flag pattern which follows the breakdown below the 3-year primary uptrend line. T2 (40.50) is the current final & preferred target with a suggested stop above 49.50 or lower, if only targeting T1.

Oct 012014
 
ALK weekly Oct 1st

ALK weekly Oct 1st

ALK (Alaska Air Group Inc) will trigger a short entry on any move below 42.20. T2 (34.40) is the current preferred target with a suggested stop over 45.10. ALK was recently shorted on a break of the daily uptrend line back in late July and hit the sole profit target for a quick 10% gain less than 10 trading sessions later. That previous trade was meant to be a relatively quick trade with a modest profit target because the price target on the daily chart also corresponded with this more significant, longer-term uptrend line shown here on the weekly chart. As expected, ALK did bounce off that initial tag of both the horizontal support (T1 on the daily chart) and the intersecting longer-term bull market uptrend line which goes all the way back to the July 2008 lows.

With ALK now trading below that long-term bull market uptrend line & a weekly candlestick close below likely to occur by end-of-day Friday, ALK looks to offer an objective long-term swing short entry here although it would be prudent to wait for prices to break below the former T1 horizontal support level of 42.20 (which would also take out today’s earlier LOD of 42.21).

click here to view the live, annotated weekly chart of ALK   or  click here to view the live, annotated daily chart of ALK (notations are from the previous trade).

Sep 262014
 

FISV (Fiserv Inc) will trigger a short entry on a break below this 3 year primary uptrend line/bearish rising wedge pattern. T1 (1st target) is 54.38 & T2 (the final & preferred swing target) at 48.05. Stops to be determined upon entry but my expectation is that a breakdown of this pattern is imminent at this point and if so, my likely stop would be just over the recent highs of 66.11. If FISV were to trigger a short entry soon, this trade would offer a very attractive R/R of about 5:1 to the final target and 3:1 to the first target (where a reaction is likely).

 

click here to view the live daily chart of FISV       click here to view the live weekly chart of FISV

Back on July 22nd, FISV was recently added as both an aggressive short entry (Active Trade) at 62.30, in anticipation of a breakdown below the trendline, as well as a Short Trade setup with an initial, conventional short entry or an add-on to the aggressive trade to be triggered on a break below the trendline. With prices yet to trade below the trendline, this is really just an extension of that previous, untriggered trade setup. However, the stop criteria for the aggressive trade was a move over 64 which just recently occurred. Therefore, that trade was stopped out and moved to the Completed Trades category. However, for anyone who might have shorted FISV back then and still holds a position, this trade still looks very promising from a longer-term perspective so consider a stop slight above the recent high of 66.11 or calculated on a 3:1 R/R to your preferred swing target, depending on your cost basis for the position.

 

Sep 252014
 

GMCR daily Sept 25thGMCR (Keurig Green Mountain, Inc) will trigger a short entry on any move below 125.35 (5 cents below the 8/22 gap). T2 is my preferred swing target at this time with a final target (T3) at 84.02. Suggested stop slightly above the recent highs for those targeting T2 or T3 with a tighter stop suggested if only targeting T1.

GMCR was recently added as a Short Setup on August 8th with an entry to be triggered on a move below 112. The stock never did trigger an entry so the notes and previous charts on that setup have been moved from the Short Setups to the “Uncategorized” category (as untriggered trade setups never become Active Trades, hence, are not moved to the Completed Trades category). However, as with all previous posts, those recent posts on GMCR are still accessible by clicking on any of the “GMCR” tags, such as at the bottom right corner of this post.

The second divergent top highlighted on this 3 year daily chart of GMCR comes shortly on the heels of the recent, much larger divergent high (blue lines). Taken together, the bigger picture (dashed red line), shows a very powerful, divergent high going all the way back to February. Translation: I’m not looking for a quick trade on GMCR, rather a multi-month correction that will likely result in a drop well into the double-digits (a 33% gain if T3 is hit).

click here to view the live chart of GMCR

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