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