The stock below, KeyCorp, is a good short candidate in its own right, but it’s also representative of the kind of short I’m seeking these days. It has these elements:
+ a clean topping pattern;
+ a firm drop, exhibiting that it’s vulnerable to the general weakness we saw in past weeks;
+ a hearty bounce, pushing it to a more attractive risk/reward level.
As with so many other stocks, this one has a horizontal line anchored on a gap (in this instance, at a dollar value of $12.71) (more…)
Well, pretty-much filled, anyway. I’d say the recovery is over for this one.
Bank of America had a gap of 15.93 which has been closed, to my eyes, satisfactorily. I am now short the stock and long the August $17 puts.
Interest rates have been zooming higher the past four days. I think an important level to watch is the gap on $TNX at 26.11 (that is, a rate of 2.611%). If it stllls there and starts working lower, the drop in interest rates will probably accelerate to new lows for the year.
How’s that for a confusing post title? Anyway, I am so short, I could jump off a dime, and I am merely adding to positions. The latest of the emerging markets ETF, symbol EEM, which is approaching a gap-fill as well as the underside of a trendline.
I have only two small screens today, not my usual eight large screens, but even in these primitive conditions, I am loving what I am seeing. Blood, chaos, and crumbling stock prices everywhere. Keep this up for a few years, and I can find my bliss. I’ll mention one stock in particular (which I’ve pointed out many, many times both here and on TT) – CREE – that has fulfilled its destiny of closing its gap. Sure, it could keep falling, but at least this goal has been met. Huzzah!