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Monday, February 16, 2015

My Favorite Short Set Up Learned from @Modern_rock

1) Daily overextended
2) Gap up open with possible parabolic move up out of the gate
3) Daily resistance level over / under
4) Short first weakness

Plenty of stocks are setting up for this set up
Here are few I will be watching:
GENE, CRIS THRX VIP CYBR CYTK GENE WWE OIBR WPRT

I will look for gap up open, exuberant rally and then weaker highs.
I may short directly into a major daily resistance before lower highs are established.
However that is more risky, but the rewards could be excellent, since many times the smart money will unload into the opening spike, after which bottoms fells off, and drop is very quick and dramatic.
But for safer bet, wait for some confirmation of weakness.
It is very simple trade , it is great if you are capable of watching more screens, since it doesn't happen to every overextended stock.
Stops are very tight, having in mind many traders can have the same idea and many can be short, hence  short squeeze can spike the stock much higher then you can think, and you can lose lot more that you can imagine. Keep on mind how much you can lose first !!!
I will take the smallest loss, and will look to re-enter if the conditions are un-changed.

This is how I visualize the plan :
CRIS daily


CRIS intraday 1 min chart


If CRIS openes strong , gap  up, runs to the 3.40 , 3.50 area, I will be shorting the weaker highs.
If I am not instantly in green I will exit and look to re-short.
You may pay and have a stock guru guide you through trading learning curve , but you can save your money and learn from those who like to share free, like @Modern_rock.,




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