SSS - Stocks Rallying into Potential Resistance

Published : August 29 2011 at 13:57 ET

While the pocket pivots in MON and JVA may not come to fruition, it is necessary to maintain an even hand here and take note of stocks on our short-sale target list that have rallied up into resistance: AMZN into 50-dma, TIF into 65-dma, BIDU into 50-dma, CRR into 50-dma, SINA not quite into 50-dma but close enough, AGU into 50-dma, DECK approaching 50-dma, UA into 50-dma, SOHU into 50-dma.

If the general market is unable to rally further from here, some of these may roll over with the market, hence would-be short-sellers should be aware of the action in these stocks, all of which have shown prior base breakdowns. Keep in mind that success shorting into any of these rallies will likely be dependent on what the general market does here, as a sustained general market rally could carry these 3-5%, perhaps a little more, past these logical resistance areas at the 50-dma, 65-ema, or 200-dma moving averages.

For the sake of fair disclosure, we are testing short positions in any number of these short-sale targets as they rally into potential resistance, although it is not clear just yet that they will be held.

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