How To Short Stock, Tip For Novice Trader $NGLS

NGLS has been in a 4 days uptrend . In regular market conditions 4 bars ( of any time frame ) is above the average move in one direction. A correction is due. You can make money by buying low and selling high. However that order is not necessarily of how it must happen. You can first sell and then buy it back at lower price. Let's not get into it why and how and all the technicalities of the short selling. Just take it as it is and know that you are obligated to buy the stock back after you have short sold it. And know that if you you buy first,  the risk is  limited, and you know how much you are risking if the stock drops to $0.00. You will lose what ever you have in your broker's account. When you short sell it the risk is unlimited because the stock can go up to infinite, so you can lose more that what you have in your brokerage account. Recent Example  KBIO.

NGLS is a big board stock , with 2.5 billion market cap,  not a low floater , and any big surprises that may sky rocket this stock are extremely pretty small. In translation this means that: there must be so much buying and so much volume to make a big move up. This is important , so you are aware of the risk you are taking when short selling this stock. You do not want to be short on a stock that can move up against you very quickly, to cause big losses in very short time. You need to be able to get out timely , and without any problems  filled.
So we have:
1) Four days over-extension in clean one direction
2) Big board symbol
3) no current recent news
4) good average volume of 2,000,000 per day  ( easy fills)
5) price pattern which I will explain below :

NGLS ran 4 days up from $9.01 to 13.66 !!! Gaining over 30% and current price is hitting a overhead resistance 14.00 area. Click on the photo to enlarge it. Click on the BACK browser button to go back to the context

NGLS on Jan 25

The red lines are intra-day support and resistances 

as reference levels of points to get in a trade and points of planned risk 

NGLS Jan 26 

Who ever was long form $9.00 area is IN THE MONEY making great profits in  less then a week. Think about it: if it happen to be you making 30% gains in one week would you take at least some of your profits if not all of it ?

Also keep in mind one great possibility:
It took 4 days to go up 30%
It may take ONE DAY to go down 50% of the move up, if not even more then that.
On the daily chart NGLS have not made yet higher lows.
So the odds to make new low below the $9.01 are quite great.

These are not prediction of what will happen. This is only speculations of what may or may not happen. NGLS can easily go up lot more many days in a row. However limiting the risk is key in any type of business just like in trading. In case you decide to short sell NGLS make sure you have exit plan if thing do not pan out as planned and as expected. Plan how much you may lose and you are willing to lose if the NGLS keeps going up and up in case you have a short position.

Same goes for the longs: just because the stock may go only to $0.00 that doesn't mean you have to stay long till it gets to $0.00.

Have a Happy and Safe Trading