More Short Ideas

I continue to be very pleased at the structural breakdown of the stock market. It's like watching a cruise ship turn around; it's slow, it's steady, and it's massive.

Below are a bunch of different short positions I'm in right now; as always - (disclaimer-time here!) - these are just for your observation, entertainment, and further analysis. These aren't recommendations. But they're worth checking out.

Here's Comtech (CMTL) in a very toppy looking pattern with a nice clean stop price.


Next is Conmed (CNMD), which I've been following a long time. It broke beneath this neckline a couple of weeks back and has now retraced to the underside. Looks like a nice short opportunity to me.


Everyone's favorite Internet stock, Google (GOOG), is below; once again, a nice clean break with the price kissing the underside of what used to be support:


Gilead (GILD), an idea I got from fellow chartist Michael Kahn, is shaping up to a lovely head & shoulders pattern (obviously a favorite of mine, since I keep mentioning this popular pattern):


Chocolate maker Hersheys (HSY) formed a massive head & shoulders pattern. It's not perfect, since the left shoulder is actually a little lower than the right, but we'll let that go.

Invitrogen (IVGN) broke a huge ascending trendline a couple of weeks ago and is kissing the underside of that line:


Kerr McGee (KMG) has benefited from the massive surge in energy prices; to my view, this looks extremely richly priced at this point; notice how lofty it is with respect to the wedge pattern I've drawn.


OMI Corp (OMM) is a very simple rectangular pattern; as with so many of these examples, support has changed into resistance, and the price is beneath it now.


And I must again mention PetsMart (PETM), mainly because this head & shoulders pattern is so large (the only larger one in recent memory is Family Dollar Stores, FDO, mentioned a couple of times in this blog, which continues to founder).



As always, good luck in your trading!

Woof

In a recent posting I mentioned how I "jumped the gun" and shorted symbol LGF since it was in an emerging head & shoulders pattern (but had not broken the neckline yet). As the post states, this paid off (even though one should not typically engage in a position until a pattern is confirmed).

Well, as my fellow technician Britney Spears sings - Whoops, I Did It Again - and I shorted PetSmart (PETM) on the basis of an emerging head & shoulders pattern. Although this is only going to keep encouraging my bad habits, the stock got hammered today, down nearly 10%. Now it has broken the neckline, and this short position is even more attractive than ever.

Recent Performance and a Book Recommendation

I first wanted to see how the recommendations I've been suggesting have been doing. The spreadsheet below shows an average return of over 11%. Not bad for a market that's going nowhere and stock picks that are typically a month old.


I also wanted to suggest a book I finished reading yesterday - Trend Following. You can learn about it on Michael Covel's site. I have no affiliation with the author, but I think it's a terrific read. The web site is pretty interesting as well!