March 4th 2007
Swing Trade - Short PCU Entry: 66.50 Stop: 71.05 Target: 60.50
Let's start things off tonight with PCU. I have noticed this weekend that the shorts are starting to setup. PCU is no exception by sporting a nice bear flag:
PCU is the perfect example of my bread and butter short pattern.
1. The stock has run up
2. The stock breaks and forms a bear flag
3. Volume trends lower within the bear flag
Like i stated in my extreme moves post from last week. Extreme moves give us opportunity. Everybody and their cousin has bought PCU. We can tell that from the way the stock has moved since the beginning of the year. In that time PCU has carved out a 50 percent gain.
But, like the overall market, PCU is also showing weakness. It went parabolic and gapped down on heavy volume. Now we see an area of consolidation from 2/27 to 3/2. I'm putting my entry slightly below this area of consolidation. If history is any indication of things to come, PCU should head lower out of its consolidation. Of course, there are no guarantees, that's why we use stops and do our own research.
There are lots of other setups going on right now. I wish I had time to throw charts up on all of them. If you have some time check out X and ATI. You'll start to see a common pattern. The market is full of shorting opportunities right now. I feel kind of evil cheering for market tops like this, assuming it is a market top. But if it turns out to be a top then we have a shorting opportunity that comes once a bear market.
PCU is the perfect example of my bread and butter short pattern.
1. The stock has run up
2. The stock breaks and forms a bear flag
3. Volume trends lower within the bear flag
Like i stated in my extreme moves post from last week. Extreme moves give us opportunity. Everybody and their cousin has bought PCU. We can tell that from the way the stock has moved since the beginning of the year. In that time PCU has carved out a 50 percent gain.
But, like the overall market, PCU is also showing weakness. It went parabolic and gapped down on heavy volume. Now we see an area of consolidation from 2/27 to 3/2. I'm putting my entry slightly below this area of consolidation. If history is any indication of things to come, PCU should head lower out of its consolidation. Of course, there are no guarantees, that's why we use stops and do our own research.
There are lots of other setups going on right now. I wish I had time to throw charts up on all of them. If you have some time check out X and ATI. You'll start to see a common pattern. The market is full of shorting opportunities right now. I feel kind of evil cheering for market tops like this, assuming it is a market top. But if it turns out to be a top then we have a shorting opportunity that comes once a bear market.
If you like this post, then consider subscribing to my full feed RSS feed. You can also Subscribe to A Trade A Day by Email and have new posts sent directly to your inbox.
No Comments yet »
