Monday, September 1, 2008

Shorting into weakness/watch for Tues

Although some of the best shorts come from breakdowns of artificially extended longs of the ZYXI/STXX/POGS/WRSP variety, in some circumstances some great shorts may be had from stocks that have already dropped sharp and will therefore be missed on scans that only look at percent gains. Of course these stocks could rebound but this is the same as waiting for the short from stocks that keep extending, in both cases the short is only good on red. My first test case (on the blog) is BFRM - already down big from $5, if you look at the intraday chart the stock dropped .60 in the last 15 min. on huge volume in what looks like a panic selloff and only appears to have been stopped by the closing bell. I'll watch close Tues for red and will probably jump on this at the open short, this one could break its 52 week low of 3.43 as early as tomorrow, if so there could be even more downside.

1 comment:

Androo said...

Good find JV, I'm looking for other techniques too in addition to Muddy's and 13th's. I'll be watching this one too. CHIP as well, went up a lot on a special dividend (huge) so I think it has short potential on red.