Short-Sale Set Up - What to Watch For - Gil's Short Strategy
|14 May 2020 10:47 ET
Since the fastest downside moves tend to occur off the peak, I would watch some of these extended leaders for signs of cracking. This would entail a break below their 10-dma and 20-dema as a potential early entry using those moving averages as your covering guide. I do not necessarily believe that the market is destined to go higher. We could retest the March lows, and in that case the last thing I'd want to be is long. Thus keep an eye on FB and GOOG which are now below their 10-dmads. As they pull into their 20-demas that can offer a lower-risk long entry spot, but if the 20-dema is breached, that could trigger them as short-sale targets at that point. Also keep an eye on cloud leaders like COUP (wobbling at the $200 Century Mark), DOCU, MDB, TTD, VEEV, ZM, ZS, etc. which are extended and may be vulnerable to sharp pullbacks.
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