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Stocks setting up for short trades

Friday, 09 September 2011 08:13

The setup from the last two days that was creating good buying opportunities has reversed and is now setting up for better short plays with the Pivot Point and R3 being the predominantly close pivot levels. Just as yesterday proved good support with the S3/PP, this setup hopefully will prove solid resistance.

Another aspect I have noticed is that there are many stocks where S3 and S4 is lining up with a support point on the daily chart. This is great because it creates an excellent and easy cover point for a short or a spot to get long from with an advantageous stop if the price moves through the level.

Good example is AGU, a name we traded yesterday on our live webinar. The R3/PP setup is forming at $88.18 and the cover point or potential long is at $85.80 which represents S4 and the 50 day Simple Moving Average on the daily chart. At Day Trade Well we teach that the more indicators that line up in your favor then the more conviction you can have for the trade and the more shares you can allocate. AGU is a wonderful example of this rationale.

Happy Trading!