SSS - ARM Holdings (ARMH) Head & Shoulders Set-Up

Published : July 30 2013 at 10:23 ET

While the market remains in an uptrend, it doesn't hurt to be aware of potential short-sale set-ups as they develop, since there are situations where certain stocks can become short-sale targets during a market uptrend. ARM Holdings (ARMH), shown below on a weekly chart, is setting up as a classic Head & Shoulders set-up with the stock reversing back down below its 10-week moving average last week, setting up the potential peak of a right shoulder. Notice also that the 10-week moving average is crossing below the 40-week moving average for a "black cross."

The daily chart shows a more granular view with the stock currently trying to push up into the 200-day moving average on weak volume after a high-volume reversal last week that took the stock below both the 50-day and 200-day moving averages. This becomes shortable here at the 200-day moving average with the idea that it will not be able to rally much past the 50-day line at 40.48. The downside objective would then become the neckline somewhere down around the 33 price area. With the market currently in an uptrend, your odds of success with this short-sale set-up obviously increase in the event of a pullback or correction.

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.