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Strategies & Market Trends : Shorts waiting to happen

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To: Greg Butcher who wrote (838)12/10/1997 8:34:00 PM
From: Cadaver  Read Replies (1) of 852
Greg....I dont get your strategy. why would you short something that has a saucer shape? Saucers are bullish. Umbrellas are bearish.

MEH is supported by 20 day and 50 day moving avgs.

Good news etc. is immaterial.

Haven't you read headlines like: "Dow rises inspite of employment numbers" and "Dow falls on employment numbers" in the same newspaper?
Fact of the matter is one can never know all the fundamentals. But one certainly has access to all the technicals.

Let me put it this way:
News will affect stock price only if the stock is ready for it.

Dont worry about news. It doesnt mean a thing as far as immediate price is concerned. News only affects the long run.

Use this rule for shorting 3 months or longer:
Wait till the price falls below 50 day moving avg. There must be at least one sharp downward move. The 50 dma must not be just above the 200 dma. Sometimes, the price cuts thru the 50 but bounces off the 200 dma.

Use this rule for shorting less than 3 months:
You can also short during corrections of a rapidly rising stock. What happens is that the stock is still strong, but is currently overbought. If the chart looks parabolic and if nearly every buyer is thrilled at how much money they've made in that stock, then it is a good candidate for correction shorting. When the stock goes parabolic, wait until it opens with a large gap up. Short the stock within 15 minutes of open. It will likely crash to just below the previous day's open. Cover in a couple of days when the volume shrinks.

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