SHW was mentioned in the previous post along with VAL. Both have similar charts, both are in the same industry (paint manufacturers) and as such, will most likely move relatively in tandem. Therefore, make sure to adjust your position size for the overlap if taking both short trade. e.g.- If your normal position size is $10k, you might short $5k of VAL and $5k of SHW.
As noted on the daily chart below, prices are approaching the apex of a bearish rising wedge pattern which has formed following the breakdown of the ascending channel that began back in the fall of 2011. As the weekly chart shows, SHW has managed to wedge higher in price while the MACD & RSI have lagged significantly (negative divergences). At this time, T2 is my preferred target although that might be extended soon. To play it safe, I’m going to wait for prices to break below the bottom of the wedge before shorting although an aggressive trader could certainly establish a partial or even full position here with a stop not too far above the 167 area.
