SAVE daily chart July 24th
SAVE (Spirit Airlines) will offer an objective short entry on a break below the rising wedge pattern. Although my market commentary has been light as not much has changed from a technical perspective in weeks, it should be apparent from the recent addition of new short setups that for the first time in a long while, I am starting to find some very attractive bearish trade setups with clearly defined entry criteria and attractive risk/reward profiles. I still have zero desire to short the broad markets but one by one, I’m coming across certain sectors that looked to have likely already topped (such as the regional banks) or may be getting very close (such as the airline stocks).
As stocks can move very fast, especially when we are in the thick of earnings season as we are now, I will continue to add some more of the trade setups on my watch-list in order to allow ample time for the charts & notes to be reviewed as well as price alerts set in advance. Some of the recent stocks on my watch-list such as FRC last week and ALK earlier today, have dropped so fast following the my price alert for the breakdown that by the time I received the the alert, mocked-up a chart, uploaded it, composed the post and published the post, the stock had usually either surpassed any objective entry (such as FRC last week) or may be past the most optimal entry level by the time you have read the notes on the trade & reviewed the chart(s). One reason that I love shorting stocks is the fact that they typically fall much faster than they rise, allowing for very handsome profits in short order. Because of this, short-side traders must be more nimble than long-side traders as stocks often fall quickly following downside breakouts of bearish price patterns & tend to reverse very hard & fast once support/target levels are hit.
Note: SAVE is scheduled to report earnings before the open next Tuesday, July 29th so it would only make sense for a swing trader that prefers not to hold positions into earnings to wait until at least Tuesday before establishing a short position in SAVE, although an aggressive trade could take a shot at establishing a partial position here at the top of the wedge pattern with a stop not too far above. Regardless, SAVE is only a Trade Setup at this time with an official entry to be triggered on a break below the pattern.