NEVER EVER SHORT A STOCK!

Stocks set up to sell-off are found in this section.

We give extreme caution to taking any short positions!

For details on the technical patterns used, please refer to our Pattern Rules.

ARE YOU STILL READING?

Shorting stocks, for most people, has been a losers game.

It is only under certain situations that it should be considered.

Because you are still reading, the following are the guidelines we use to select stocks to sell short:

• Only short in bad markets. This means the red flag is flying and there is considerable evidence to believe the trend is down. Our weekly commentary will make light of these situations.
• Look to short former bull market leaders that are in cyclical sectors. Techs, materials, transportation, discretionary etc.
• Don't try to pick an absolute top, but wait until you have seen a potential top with around three failed rallies. Optimum selling opportunities often occur months after a top has been put in.
• Short only under the 50-day moving average. Ideally the 50-day moving average will be under the 200-day average.
• Only short stocks with high daily average volume. Over 1 million shares per day.
• Use 20% price objectives, with the tightest possible stop-losses (the smaller the better, don't be afraid to re-enter.)