• ACE - Aug 01 201420140801
  • AFL - Aug 01 201420140801
  • AIG - Aug 01 201420140801
  • ALL - Aug 01 201420140801
  • AON - Aug 01 201420140801
  • AXP - Jul 25 201420140725
  • BXS - Jul 22 201420140722
  • CB - Aug 01 201420140801
  • FFIN - Aug 14 201420140814
  • FISV - Aug 07 201420140807
  • FRC - Jul 31 201420140731
  • GMCR - Aug 08 201420140808
  • HAIN - Jul 21 201420140721
  • HSY - Jul 21 201420140721
  • KATE - Jul 29 201420140729
  • KBE - Jul 21 201420140721
  • KIE - Aug 01 201420140801
  • KRE - Jul 31 201420140731
  • LYV - Jul 29 201420140729
  • MET - Aug 01 201420140801
  • MMC - Aug 01 201420140801
  • PACW - Jul 17 201420140717
  • PNC - Jul 17 201420140717
  • PRU - Aug 01 201420140801
  • SAVE - Jul 24 201420140724
  • TRV - Aug 01 201420140801
  • XLF - Aug 01 201420140801


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.

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 072014
 

FISV (Fiserv Inc) was added as both an Active Short Trade as well as a Short Setup near the top of its bearish rising wedge pattern in this post on July 23rd. As expected, the stock moved lower from that point and has recently been tapping on the bottom of the wedge pattern, which is also the bottom of this much larger ascending price channel as viewed on the weekly chart below. I wanted to point this out as a break below that multi-year uptrend line (bottom of the wedge & the price channel) will trigger the next entry on what I feel is one of the better looking swing short trade ideas at this time. Remember, I can’t give specific price trigger levels on breakouts above/below trendlines as the price level of a trendline changes every day (only horizontal support & resistance levels are static). Therefore, it is best replicate the trendline on your own chart and set a price alert for a break below the trendline, assuming that you are interested in this or any trade idea using a trendline break as the entry criteria.

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

 

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

Aug 012014
 

This video covers the 10 largest components of the KIE (SPDRs KBW Insurance Index ETF) by market capitalization (not the actually top ten components of the ETF, which uses a different methodology other than a pure market cap weighting). My reason for selecting the 10 largest components of the KBW Insurance sector was to make the case that I was not cherry picking the most bearish looking chart patterns out of the KBW Insurance Index, rather to point out the fact that nearly, if not all, of the top 10 largest components of the sector (by market cap) have all set up in what appears to be clearly bearish chart formations on the daily through weekly time frames.

Although these are not official trade ideas, all ten charts (plus KIE & XLF) that are covered highlight key trendlines, moving averages, and horizontal support & resistance levels, including possibly short entry criteria as well as downside price targets. For those wishing to skip ahead to the analysis of a particular chart, they are discussed in following order: KIE; XLF (and then KIE briefly once more); AIG; MET; PRU; AC; TRV; MMC; AFL; AON; ALL; and CB (one of the more promising swing short candidates). As these are the largest, mega-cap names in the insurance industry, these stocks all have excellent liquidity, a plus when trading, especially on the short-side.
 

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 »

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