Learned something today – Short on Nice Round Number

Short on Nice Round Number

Say a Stock is running on momentum from $3.20

The next stop will be $3.50, If it pass $3.50 the next stop will be $4.00, $4.10 or $4.20

If the chart is looking over extended and volume is fading and the news is not too good. Then you can consider about shorting above $4.00 and use $4.20 as the maximum stop loss.

What if the stock starts to run again? Cover with small losses or small profit and let it run again.

This time is will run to $4.50 or the next stop $5.00.

The ideal trade will then be looking at the charts and Technical to see whether $5.00 can be the top. If there is a double or triple tops (Volume fading, Top MACD turning down, Fast STO reversing). They it is safe to consider shorting it around $5.00 with stop loss just above $5.00

What to do next? You have 2 choices:

1. You can consider locking in profit on the way down.

2. Hold it until you see people starting to cover and the chart is reversing.

 

Timothy Sykes profit.ly profits

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s