A Sloper on SNX

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A thoughtful Sloper just emailed me this and gave me permission to share:

A different approach to shorting on SNX
As one can see in the graph below, SNX gapped down on lowered guidance and a decline in profitability.  If one is interested in shorting the rebound, where would a good entry point be?

A classic approach would be to wait for the price to recover to above 38, at the bottom of the gap.  But is that the only way to decipher an entry point?  A 50% Fibonacci retracement level of the total decline at 36.63 could be another good approach.

The shorts certainly seem to think this could be a good stopping point.  Yesterday, they held the stock under the 50 day MA and 58.93% of the day’s volume was due to shorting.  However, today at around 11:30 AM, the stock is above the 50 day MA and around the 50% retracement level.  Time will tell if this is a good short at this level.