Well, the question to ask, it seems to me, is how to identify the NEXT KKD ?
I think the answer begins with a process whereby you identify a list of possible candidates. In other words, you need a plan going forward. To me, these potential short candidates all have certain things in common:
1. professional gap down (i.e., huge volume)
2. failure at gap resistance
3. failure at the 200 sma
4. confirmation of that failure by a lower low, a lower peak, and a bear cross
5. major fundamental problems (e.g., restatement of earnings, management meltdown/demonstrated incompetence, etc, big-time legal and/or PR problems)... anything that is typically not fixed overnight.
These 5 criteria identify with very high accuracy a stock that is going nowhere for at least a year, more often several years.
From there, reliable support/resistance levels should be identified. These will usually take a bit of time to develop after a big gap down. A period of "equilibration" is necessary. But sometimes there are shorting opportunities anyway during this early period, e.g. a stock that rallies half-heartedly on low volume into the gap, and then begins to be turned back after reaching overbought status.
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