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P (Pandora) Trade Setup & Entry

While a somewhat aggressive trade in anticipation of a breakdown below this rising wedge pattern that has yet to occur, P (Pandora Media Inc) looks to offer an objective short entry here with the current price targets of T1 at 11.72, T2 at 11.10 & a potential *T3 at 10.43 (*TBD depending on how the charts of P & the broad market develop going forward. The maximum suggested stop is a daily close above 15.30. P is at horizontal resistance with downtrend line resistance just overhead. The bearish rising wedge on the daily chart indicates a likely trend reversal is likely to kick-off in the coming days/weeks.

Shorting a stock while still inside a bearish rising wedge pattern as well as in a solid uptrend in anticipation of a breakdown that has yet to occur is an aggressive, counter-trend strategy. More conventional traders that like the setup might opt for a confirmed break below the wedge pattern as well as additional bearish confirmation in the broad market, such as a break below today's lows. Another strategy would be to take a starter (fractional) position here, adding to the position if/when Pandora breaks below the wedge pattern. The Suggested Beta-Adjustment for this trade is 0.75.

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Sep 12, 2016 11:00am|Categories: Completed Trades - Short|Tags: |4 Comments

4 Comments

  1. Shambo September 12, 2016 11:17 am at 11:17 am

    nice, Randy. I like those trades with tight stops. Nice entry point right now.

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  2. Gaucho September 12, 2016 11:20 am at 11:20 am
    • rsotc September 12, 2016 1:55 pm at 1:55 pm

      Thx Gaucho. I figured today’s pop was induced by event such as an upgrade but wasn’t sure who to thank for it as this morning’s pop (so far) provided a nice entry with the post-opening rip in P slow but steady being faded through the session so far. Ideally, Pandora should remain below 14.30 from here for those wanting to use a very aggressive stop while a move below 13.70 is likely to start the anticipated correction. Thanks for sharing that info.

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  3. rsotc September 13, 2016 9:45 am at 9:45 am

    Pandora announced before the bell that they have signed direct licensing agreements with Merlin Network, Sony Music and Universal Music Group, as well as The Orchard and 30 other independent labels and distributors. The stock rallied in pre-market only to see all those pre-market gains & then some faded by the open. The day is still young & the suggested stop remains a daily close above 15.30 but so far, so good when you see a rally sparked on good news sold into just as soon as it appears to be getting some traction.

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