"Short" DDD-overbought and at downtrend resistance
Updated
Again, I'm not one to short stocks, but if I was, I would if I could do it at this level (between 3.97 and 4.01).
It's both overbought at 3.97 and RIGHT up against down trend resistance, plus it's been up 6 of the last 7 days. I think it's due for a breather and the technicals and candles say here is a nice spot to do it.
With this (hypothetical) short, personally, I'd be out at the close of the first down day, hoping for maybe a 1-4% 1 day pullback. I could see it dropping all the way to 3.50 pretty easily here, too, though if it gets rejected here. I'm just not that brave.
Even though the stock is down 60% in the last 12 months, it already broke the 10 month downtrend line from the high last July, so another break of the shorter downtrend is not improbable. I wouldn't get greedy here myself.
A day 1 close between 3.97 and 4.01 might convince me to add a little to the short position, but not any higher. A close above 4.01 and I could easily see not getting back to that original 3.97 level anytime soon, so adding above that level could be throwing good money after bad.
A close above 4.01 could trigger short covering from the second down trend break in two months and it could make it pop to 4.50-4.70 pretty quickly and easily. If it closes above 4.01 or breaks through 4.16 intraday, I'd be out of this hypothetical short with my relatively small hypothetical loss. A 4-5% loss is recoverable with 1 or 2 good trades.
This hypothetical short is just for entertainment purposes, so don't blame me if you do anything dumb. Have a nice weekend!
It's both overbought at 3.97 and RIGHT up against down trend resistance, plus it's been up 6 of the last 7 days. I think it's due for a breather and the technicals and candles say here is a nice spot to do it.
With this (hypothetical) short, personally, I'd be out at the close of the first down day, hoping for maybe a 1-4% 1 day pullback. I could see it dropping all the way to 3.50 pretty easily here, too, though if it gets rejected here. I'm just not that brave.
Even though the stock is down 60% in the last 12 months, it already broke the 10 month downtrend line from the high last July, so another break of the shorter downtrend is not improbable. I wouldn't get greedy here myself.
A day 1 close between 3.97 and 4.01 might convince me to add a little to the short position, but not any higher. A close above 4.01 and I could easily see not getting back to that original 3.97 level anytime soon, so adding above that level could be throwing good money after bad.
A close above 4.01 could trigger short covering from the second down trend break in two months and it could make it pop to 4.50-4.70 pretty quickly and easily. If it closes above 4.01 or breaks through 4.16 intraday, I'd be out of this hypothetical short with my relatively small hypothetical loss. A 4-5% loss is recoverable with 1 or 2 good trades.
This hypothetical short is just for entertainment purposes, so don't blame me if you do anything dumb. Have a nice weekend!
Note
So far so good. Down 3.5% before lunch time on a day the market is up strong. If I had taken this trade, I'd be out at the close if it stays in the red. I would never get greedy with a short.Note
Out (hypothetically) at the close with a 1 day 1.5% win.Note
Trade summary (for me)
-Note: short trade
+1.5% in 1 day
Avg gain = 1.5%
Avg hold = 1 day
Annualized return = +378%
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