Yes, I see your point....
That chart strongly suggests a fundamental change in the long-term trend to a downtrend.
The daily chart confirms that, and shows that F entered an uptrend in early 2003, but that started to unravel with a topping formation in early 2004:
stockcharts.com[w,a]daclyyay[df][pb50!b200][vc60]&pref=G
F traded down through the critical 200 sma last August. Over the next few months, the downtrend was confirmed with lower lows and lower peaks below the 200 sma and a bear cross. Finally, we saw the final and most powerful nail in the coffin: a professional gap down just recently on huge volume.
Also, over the past year or so there seems to have been a significant amount of insider selling; some of this was planned, but some was not:
finance.yahoo.com
Clearly, F is dead money for the next year or more, and thus represents an excellent short possibility, except for one thing: a lot of shares are already held short (almost 10 days' trading volume).
finance.yahoo.com
That said, I think F has fallen too far too fast, and for a trade (i.e., short or swing trade, less than a month hold), I think Spreck would be well advised to look for an exit, particularly since the trade is now profitable. It will likely move against him very soon. He can always cover, regroup, and wait for F to rally into resistance, where it will present numerous opportunities for short trades over the next year or more.
Personally, I wouldn't short F because of the high risk of a short squeeze.
T |
