February 8th 2007
Swing Trade - Short XMSR Entry: 13.60 Stop: 14.50 Target: 10.00
I think this market is undecided as to where it wants to go. So I have setups on both sides. XMSR provides a shorting opportunity after the stock moves below 13.60. I would like to see XMSR close the gap at 12. Then I will rethink whether I should be in the trade. Based on the chart I could see XMSR go all the way to $10.
There are a couple of criteria that this stock has met which make me think it is a good short:
1. It's below the 50/100/200 SMA which is where stocks will often find support and resistance.
2. It is consolidating at a historical area of support and resistance after failing to continue its spike upwards.
3. It has a gap made in October that it has yet to close.
My main concern with this trade is that shorting a stock now would be going against the market's trend. The market does seem a bit range bound, but I still see the trend as up. XMSR is a stock I may short if it goes below 13.60, but if I do it will be after considering the short term future of the stock market's direction.
There are a couple of criteria that this stock has met which make me think it is a good short:
1. It's below the 50/100/200 SMA which is where stocks will often find support and resistance.
2. It is consolidating at a historical area of support and resistance after failing to continue its spike upwards.
3. It has a gap made in October that it has yet to close.
My main concern with this trade is that shorting a stock now would be going against the market's trend. The market does seem a bit range bound, but I still see the trend as up. XMSR is a stock I may short if it goes below 13.60, but if I do it will be after considering the short term future of the stock market's direction.
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