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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: hubris33 who wrote (8246)	3/13/2006 5:40:59 PM
From: chowder	Respond to of 13449

>>> if the NBR pain seems highly probable then would that have been a good place to take a short position? <<< There are several set ups for shorting stocks. I focus on just two, maybe three set ups and let everything else go. Just as when going long, when I go short, I will miss some stocks that will have moved favorably. If I were playing baseball and was formulating my strategy while in the on deck circle, I would be focusing on pitches that were about belt high, out over the plate. I would ignore the inside part of the plate and would not swing at the first couple of pitches thrown inside, even if they were a strike. I would wait on "my pitch." When I short stocks, (and this isn't the only successful strategy, it's what I use), I look for weakness. I look for a stock that shows a declining 20 period moving average below a declining 40 period or 50 period moving average, with a comfortable distance between the two. This is a bearish alignment. When I have a bearish alignment, I'm looking for two specific set ups. 1. When price sets a recent low, I'm looking to short the stock when price rallies up to a declining 20 period moving average. (I don't have any recent examples to show how this set up develops, result of bullish market conditions.) 2. I look for a stock showing weakness and short a potential break down. Here is an example I presented back on 1/31 with TIF. stockcharts.com[h,a]daclyiay[d20051031,20060131][pb20][vc60][J68327018,Y]&listNum=1 The analysis at the time: Message 22116537 This trade ended up being successful. stockcharts.com[h,a]daclyiay[d20051031,20060208][pb20][vc60][J68327018,Y]&pref=G If I don't have those two set ups, I basically step aside and wait. The only other exception would be a stock that has moved up so strongly that there is a wide separation from price support and the last bar on the chart was accompanied by huge volume. This would suggest a buying climax and set the stock up for a short position over the next few days as one could reasonably expect some profit taking. NBR didn't meet any of those set ups, so I ignored it. THIS IS IMPORTANT........... Focusing on NBR, based on the set ups I use for shorting, would have been trying to force the chart to meet some expectation I had. That's not what charting is supposed to do. Charting is supposed to provide us with the stocks that meet specific set ups according to what our favorite set ups are. TA doesn't come to the stock! The stock must come to the TA set up, otherwise leave it alone. dabum