Pattern: Potential H&S pattern forming. We are currently at the right shoulder.
Edge: Insiders have sold a lot of this stock around the $30s - $40s.
Risk Management: Entered at near the right shoulder, which gives us an extremely good reward to risk ratio - almost 4:1 for PT1 and 8:1 for PT2. Entered short sale at $34.33 with stop loss at $35.85. PT1 is $28.50 and PT2 is $22.00. We are entering pretty early on for the head and shoulders pattern so the probability of this working out is lower since the pattern has not been fully confirmed, but entering here gives us a better risk to reward ratio.
Edge: Insiders have sold a lot of this stock around the $30s - $40s.
Risk Management: Entered at near the right shoulder, which gives us an extremely good reward to risk ratio - almost 4:1 for PT1 and 8:1 for PT2. Entered short sale at $34.33 with stop loss at $35.85. PT1 is $28.50 and PT2 is $22.00. We are entering pretty early on for the head and shoulders pattern so the probability of this working out is lower since the pattern has not been fully confirmed, but entering here gives us a better risk to reward ratio.
Trade active:
Took some profits today after a decent down move the last couple weeks. Moved stop loss down to below breakeven ($34.10). This is now a risk free trade.
Trade closed: target reached:
Sorry, forgot to update this, but we closed our trade on 12/26/18 at $29 around PT1. Great trade! Potential for another shorting opportunity if another pattern forms.