SSS - General Thoughts on Shorting into Year-End
In general one should pay attention to undercuts of support or moving averages as these can provide logical points from which a short-sale target can rally. Members should read the book Gil co-authored with William J. O'Neil, "How to Make Money Selling Stocks Short" as well as the chapter on short-selling in the book Gil and Dr. K wrote, "Trade like an O'Neil Disciple." The key here is understanding what the market will give you here, so if the indexes don't break and you find your short positions are producing quick profits as they drop right down to logical support (e.g, RIMM hanging right around the 200-dma here) and going nowhere, be cognizant that an upside move in the general market could drag these higher. This is why Gil will tend to cover his BIDU and RIMM shorts in these logical areas of support, waiting for the next opportunity as he monitors the stocks within the context of the general market action. The action of the general market is more important to pay attention to on the short side than it is on the long side. We just want to point this out for anyone who is new to our methods on the short side, because as we go into year-end, history shows that the market tends to drift higher, although that is never a guarantee, and the maket can always throw you a change-up and sell-off into year-end.
This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.