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