SSS - Thoughts on the Short-Side for Tuesday, October 25 2011 at 9:00 AM Beach Time

Published : October 25 2011 at 12:10 ET

Some thoughts here on short-sale target stocks:

AAPL - Yesterday stops on AAPL at 400 were hit, but if you were using the 408 and change high of a couple of days ago as your stop then you are still in the position. AAPL is testing the $400 level again but selling volume is not particularly heavy - if you are looking to enter a short position in AAPL then watch this action here closely as a breach of the $400 level could be shortable. As well, even testing a position here at the 401 level using the 408 and change high of a couple of days ago is entirely feasible. The strict thesis, however, in shorting AAPL is that it will come down with the market, and come down harder than the market - in essence making it a short on the NASDAQ 100 with a little bit of juice added, maybe similar to a 2x or 3x NDX 100 inverse ETF. 

GMCR has not been stopped out as it has not moved above the 200-dma, which serves as both our max trailing stop for existing positions and our max stop for new positions taken on any moves up towards the 200-dma.

FOSL - this one is stopped out.

BIDU - hasn't been able to clear the 50-dma and so far this short target is still in play, continuing to use the 50-dma as a guide for a stop. Remember that moving averages can often be treated as "fuzzy" zones rather than hard lines, so you may want to set stops such that you allow for a little bit of "porosity" around the moving average. BIDU announces earnings on Thursday, but we note that the 50-dma is just starting to cross over the 200-dma to the downside, so we have to wonder what the chart is telling us about the earnings announcement.

PCLN -stopped out yesterday at 50-dma.

Keep in mind that the market remains highly news-driven currently and hence subject to plenty of volatility, so while it is quite possible to test the short side here, be ready for anything.


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.