if this 4 hour uptrend line break-down sticks (candlestick closed below), it should user in a new wave of selling that takes us to T1. although this has been an active trade for a few days, i will re-categorize it as a set-up as well since this TL break offers an objective entry. updated 4 hour & original chart below.
remember to adjust your position size accordingly with each trade. the first target (only one at this time), if hit, would be about a 30% gain from this level and if you look at the recent volatility in this stock, you’ll see that you can get punished quickly on any counter-bounces or a full-blown reversal in this stock if you are short. select your position size accordingly and don’t be remiss on using a stop-loss order. the minimum R/R for most trades should be 3:1 so if you’re shooting for a 30% gain on this one, then you should have no more than a 10% stop-loss allowance.
also keep in mind that when computing percentage gains on short trades, unlike longs, you do not take the total dollar gain divided by the purchase (cover) price. technically speaking, one would short (SELL) IMOS here around 14.50 and cover (BUY) around 10.00, which would be a 45% on a long trade (buy at 10.00, sell at 14.50 = $4.50 profit… 4.50/10.00 = 45%). however, short trades should use the total gain/entry price, in this case roughly 4.50/14.50 = 31%, assuming, of course, T1 is hit.
