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Sellingshort

MCD: Buy on the dip risk for selling shortThis stock has dipped and slid through its support, which was not a strong support level. There is minimal support nearby. And the support above is now a moderate resistance level. There was some mild rotation in the Volume Oscillator and Money Flow indicator patterns followed by pro traders selling. The reversal candlestick pattern failed. However, the risk for selling short is the retail investors and their investment group gurus advising to buy on the dip. Today's candle has buy on the dippers in the mix.
NYSE:MCD
by MarthaStokesCMT-TechniTrader
MSFT: The risks of selling shortNASDAQ:MSFT ran down yesterday but is reaching the low of the support today. The next tier of support is outlined also from the Dec-Jan Buy Zone ahead of earnings season. The risk day traders are taking selling short is if it runs below the low of the support and the Dark Pools surface to buy below its fundamental price level. This is why selling short is risky at this time. Support is around $397. The big question is where are the lows for fundamental levels for the next quarterly report. MSFT had higher revenues with slightly lower earnings. The CFO did not adjust earnings. It could gap or run down on news, but fundamentals are not way below the current price.
NASDAQ:MSFT
by MarthaStokesCMT-TechniTrader
Think Before You Short: AMZN EarningsTraders need to check weekly charts when considering selling short stocks at this time. Many times there are strong support levels close to the current sold down price action. The weekly charts also provide more data for day and swing traders to determine the all important RUN GAIN POTENTIAL. This must be calculated before any trade to determine the Risk versus Profit Potential for that trade, regardless of whether the hold time is a few minutes or several days for swing trading. For many stocks, the recent selling down is not due to weaker earnings expectations but due to an overall reaction to retail news regarding international conflicts, US government uncertainties and regional wars. The key element for trading stocks short-term is to understand where support will kick in and halt a sell short trade. Understanding the functionality and the strength or weakness of a support level is crucial to attaining a high-profit trade. It is also a factor if you are waiting on the Dark Pool Buy Zone levels for getting into the stock for a run up from support levels. Below is a chart of AMZN, which reports earnings on Thursday this week after the market close. It shows that support is strong near the current price level. This indicates that the Dark Pool Buy Zone is within that technical price range. Selling short is inherently higher risk as the support level is a long-term trend strong support. Why is it so strong? 1. There is a several-week price range that held the stock up. 2. Highs are a support mechanism when the stock market is not in a long-term downtrend. ALL traders should know that this is not a bear market. Indexes are in a Trading Range. 3. The length of the candles is significant and relevant to the strength of the support.
NASDAQ:AMZN
by MarthaStokesCMT-TechniTrader
GS Earnings and Institutional HoldingsNYSE:GS has had a sudden huge decline in its Institutional Holdings from last quarter--a whopping 12%. That's huge. This suggests that often the selling is from Buy-Side Institutions. Goldman Sachs has a buyback program of 30 billion dollars underway, approved end of February 2023. The Buybacks started in March and have continued until recently. I showed the buyback activity on the daily chart in this article earlier this month. The Support from corporate buybacks poses problems for selling short. The stock is also prone to HFT triggers with frequent gapping. The first Support level is just above the 2022 lows. The company reported earnings this morning and gapped down at open but is holding onto the sideways range it's been in for 2 weeks so far. However, Quarterly and Annual Reports are starting to show signs of weakness as this company struggles to reinvent. NYSE:GS is also facing loss of revenues from IPO underwriting as the NASDAQ Private Market is undermining the high income usually generated from IPOs by underwriters. IMO, the investment banking industry is slowly becoming obsolete as DeFi, Fintech, Blockchain technologies and Crypto currencies continue to advance and erode traditional revenue streams.
NYSE:GS
by MarthaStokesCMT-TechniTrader
Bounce Risk for Selling ShortStocks that are falling rapidly often have the illusion that they will never stop falling. The panic that settles into the mindset of an investor who is watching his or her profits and capital erode overnight can overwhelm a stock’s price action. So for a brief time, the stock can behave outside of what the chart patterns would suggest was reasonable. But the higher risk is always the bounce. Stocks can bounce without warning. Huge up days that form in a downtrend can cause significant losses for short sellers. A stock bounces because it hits a price point where: 1. b uyers are waiting to go long 2. where large-lot short sellers are preparing to exit Monthly and yearly highs are areas where there is risk for a bounce. These bounces are often caused by small-lot investors and traders perceiving this as a good place to buy a stock that has corrected. The old adage, “buy low and sell high,” prompts the uninformed to buy as a stock is running down without understanding the dynamics of a downtrend. So they buy at monthly and yearly highs when they are called out by the various news and trading chat forums: “XYZ has hit its 52-week price, this is a good time to buy XYZ.” Another big bounce area is far more important: the monthly lows and yearly lows. This is the price range where the wiser bargain hunters and bottom fishers lurk around. They know that low area is solid support and that a downtrending correction isn’t going to last on a strong company. Therefore, lows pose even bigger risk of bounces that actually can reverse the downtrend, especially if the steep descent has been underway for some time. A stock may nearly pierce through a sturdy support level, reach the yearly low and then suddenly make a V-shaped short-term bottom or shift sideways depending upon the strength of the stock and company. These sudden changes of trend catch many short traders unaware and create larger losses than monthly and yearly highs. Sideways patterns also create sturdy support levels where large bounces can occur for the rapidly falling stock. Moving averages for long-term trendlines are another area of strong support where bounce risk is high. How to avoid bounces for selling short: Identify each area where a stock could bounce. This includes the highs and lows of sideways action from prior years. Identify long-term moving average support on weekly charts. Identify monthly and yearly the highs and lows. After you have identified all support areas, determine if this support will be weak, moderate, or strong. Weak support will seldom cause problems for a falling stock and usually a resting day, at best, will form. Moderate support can cause a bounce that can take out tight stop losses and strong support can potentially wipe out a wider stop loss for a bigger loss. It is important to calculate the point gain to the lean side when selling short because bounces can occur before the support is actually touched. And do not be fooled by the falling stock that runs just beyond the support level--often a small run beyond the lowest low is just a ‘gottcha’ sell short entry for bargain hunters. This is the area where you will find the larger reversal candle patterns. Selling short is a faster-paced trading condition. It can be more lucrative with faster profits than the upside at times, but you must have plenty of experience to watch for high-risk areas in the downtrend and a strong mental attitude that allows you to cut losses quickly.
NYSE:DACEducation
by MarthaStokesCMT-TechniTrader
USD/JPY -- 400 pip sell off??USDJPY has continuously been supplied by 105.000 for quite sometime now, every bounce that has came from 105.000 has produced a Lower High in price. The 109.709 level is the high close of 2019, and has consistently held price below. I believe this big bullish push back into the high this week could be a very big "Fakeout". **Multiple Confluence levels** 5 Wave Structure completed, 3rd touch of the downtrend, triangle, etc. I am sure there are many different chart formations that can be found bearish in this structure. I won't waste time trying to identify them. I will be looking to see if we get some rapid volatility back at the 109.700 psychological level, and look for a sell stop on any daily inside bars to minimize my exposure from any bull trap spikes above the 109.709 level. Disclaimer: I stand behind my analysis 100% of the time. you should trade this set up the way that you know how to trade it, not based on me simply saying price will fall 400+pips from the 109.709 level.
Short
by benson21
2
MCD: Strong Support to Make Selling Short DifficultMCD stock is very popular with the retail trading groups. The footprint of the retail trader systems trading the stock is very obvious on this chart. The candlestick patterns are all indecisive, there are no strong easy runs in either direction, and lots of wicks and tails, which is where retail brokers are reaping huge profits. Overall, it is a very messy looking chart which makes for tough swing trading in general. Apparently some retail system has targeted MCD for selling short. But alas, it seems the system doesn’t read charts very well. The support level is strong from the 2018 sideways trading range and it will be a huge challenge to sell short into this support level. Just one fine example of why retail systems that rely on software to finds stocks to trade don’t work. They are not nearly sophisticated enough.
NYSE:MCD
by MarthaStokesCMT-TechniTrader