Three Short Flavors

By -

The markets in general aren't a very ripe place for commentary these days. So instead of talking about the indexes, I thought I'd share some thoughts on the kinds of short set-ups I'm seeing among individual equities.

The first is the "jump on the trampoline" play, in which value absolutely collapsed in 2008 and, from 2009 forward, sprang back to the failure point. I find these stocks quite enticing, since the security has tipped its hand about just how weak it can potentially be. I would caution, though, that some patterns like this have simply rolled their eyes and continued to soar right past their purported resistance levels. At least they make for relatively good risk/reward ratios.

0327-ain 

The second is the "close, but no cigar" play, in which a price hammers out what should be a powerful bullish breakout but winds up limp. A failure to breakout is a danger sign for the bulls on a particular security, and I think it provides another favorable risk/reward setup.

0327-crm 

Finally, there is the set of lower highs, as represented below. This is probably the least speculative of bearish plays, since the stock has already demonstrated its inability to climb progressively higher.

0327-pnk

I would close by suggesting that the grammar freaks on this board (such as myself) who also enjoy a rather NSFW-laugh might get a kick out of this. Bless the person that made it.