The Kinds of Shorts I’m Seeking

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Given the current market's vagaries, I continue to stay partly in cash (75% of my portfolio is committed) with a blend of long/short positions (about 20% and 80% short). The shorts I am seeking resemble, in many cases, FFIV, shown below.

0228-FFIV1

What I see with a chart like this are several attributes:

(a) a huge run-up in price;

(b) a dramatic failure of some kind (in this case, a large gap down);

(c) a robust attempt to recover that failure, which itself has failed

0228-FFIV2

FFIV is particularly good since it has broken a major ascending trendline (circled in green, above). Even with the indexes lurching to new highs seemingly every day, stocks like FFIV seem to be the most vulnerable to inevitable….but too-long-awaited…..market weakness.