3 stocks to short

People speak about
diversification. It really is not about diversification
when it is money that
you are serious about making. It is about being in the right place at the right
time and having the ability to execute the completion of a trade. It has nothing
to do with diversification. Making money has nothing to do with diversification.
Diversification leads to mediocrity. I am not diversified. I am concentrated in
long and short positions in individual stocks that express favorable odds to
provide gains. Long and short. Let’s get into it right now. I will examine 6
stocks that I currently have long and short positions in. Let’s get into it
right now.


DD |
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The first thing that came into
my head just now is that I am positioned in an old man stock. Well, I could care
less. I don’t care if it is old school. It is just a chart that expresses a
positive price pattern and good energy and share owner satisfaction. That is
what is happening in this instrument right now. It is just the tale of the tape.
That is all it is. The advance is young. There is no story. The story is right
in front of you. It is on the verge of breaking to new near term highs and a
rise above 45.75 on a close and that could very well be tonight, is a buy
signal. It is a signal to add to the position and let the current wave of buying
power lift you high above the clouds and be right in sync with the RAM sitting
atop the nest provided by the bald Eagle. Sitting atop of the world occasionally
gazing at my favorite Lady everyone calls Liberty and living the dream of every
red blooded human. To be on top of the world. That is what share owners of DD
may feel in a few months should the stock rise above 45.75 and make its way back
to the peak it fell from last year and that is 54.90. That painful decline is
history and it is in a new advance as it recently negotiated and crossed some
stiff resistance in the 42-44 zone. The 50 day line ought to be used to stop it
for traders. It is a low risk try.

U.S Bancorp
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What the, Hey this stock is
breaking out! Look at its chart and see for yourself. It has solid support above
30. It is a timely play. The large banks are in great technical shape right now
and having a basket of big banks means being where the positive action is right
now. Right now banks like BAC and USB are timely. That is why I own them.

Kansas City Southern
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I have a position in a rail
road. It is a hedge. I have lots of energy exposure right now and use transports
to hedge that bet. It is in good technical shape and that makes the play
worthwhile. Energy and metals are heading into extreme bullish zones. That
eventually ends. How will it end? It is a good idea to hedge the energy and
metals with stocks like KSU. As long as the chart tells a positive tale then it
fits like a glove. It fits into the blend currently in place like a flower
delicately arranged just so with simple grace. I invite you to look at the chart
and see how KSU currently expresses itself and notice the trend is up and the
advance is in place and the odds favor higher price zones. The stock broke out
the other day off of an already steady mature advance and the break out
indicates loftier price zones. I stuck a toe in the water and will buy more
shares as it comes into test the support level from where it broke. That would
be in the 25-26 zones. That is a good place to grab shares. Right at that point.

Hot Topic
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Teenagers today are more fickle
then ever. I know. I am an expert being the proud parent of 15 year old twin
daughters. So what the heck am I doing getting involved in HOTT? They wouldn’t
step foot in one of those stores. My kids are into American eagle and that is
that. They just love the Eagle but they don’t know that yet. They have a big
crush on the bald eagle that hasn’t happened yet. It will. But the heck with
that story and let’s get into the real reason for the play in HOTT. The real
story is in the price action of the stock right now. Right now the stock is
climbing out of a base built after it got nailed to the wall and beaten to a
pulp and left for dead. That is what happened to HOTT. It experienced a brutal
decline and crawled along the bottom for quite some time. Today it peaked its
humble head above the ground to come up for air and perhaps it is ready to make
the climb back up from whence it came. All HOTT is doing is trading out of stage
1 and into stage 2. Now is the ideal time to buy HOTT. It is timely right now.

Quote |
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I caught this stock just right yesterday. I
caught it as it caved. I have been watching it out the corner of my eye and I
happened to glance at it full with both eyeballs yesterday as it failed to hold
40. I jumped on it selling it short near 40 and made money in it right out of
the box and that is always gratifying. It is! So I intend to short more BRCM on
a rally back to test its 50 day line at 43.90. The stop ought to be placed at
44.05. If the stock falls below its 150 day line at 37.98 then I will short more
and short even more if it fails at the 200 day line at 35.79. As you may notice
I am early and it is a play for the next 6 months. If this market fails then
BRCM is destined to test its 200 day line at which time I will either cover or
short more and that depends entirely on the action.

Techne Corporation

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This is another medical stock in trouble and
the way to benefit from its decline is to sell it short. It is the best way to
make money if you intend to be involved in this instrument. Look at the chart
and that ought to open the senses and enable you to discover the current truth
that surrounds TECH. It is in decline. That is a fact. Sell it short on a rally
up to 55-56. I stuck a toe in and will sell short as it rises to test
resistance. If it fails up in the 55-56 zones then the stock is headed for a
fall. It is rolling over and falling off a cliff. That is a fact. But place the
stop at 58.30 just in case.

Legg Mason
LM |
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I worked at Legg Mason once upon a time in
what is several life times and incarnations ago. I am not short this stock right
now. I will be in a rally back up to the 115 -119 zones. That is the level I
recently shorted it and did so on 2 occasions within the span of 10 days and
took it from 118 and change down to 111 and change the first time and 118 and
change down to 109 the second time and I am going to just keep doing it if the
stock persists in trading in a such a volatile manner. LM is in decline and that
is why it is a compelling short. Just gaze at the chart and let the chart tell
the tale. It tells a tale of a stock at the very outset of a decline. Place the
stop above the 200 day line in the vicinity of 120. Sell it short near 118.

It is a good part of the day.
Time passes. In an hour the market will open and I am about to get set up at my
perch front and center and play a part ,a role ,in the most entertaining show on
earth. It is filled with drama and comedy. It provides entertainment across the
board. It fills with promise and let down if you let it. I am involved in every
stock that I am into long and short and am ready and flexible to do what is
necessary to have the best possible combination in place every day. The blend
put together right now has one common thread. The stocks that are open short are
in decline while the stocks held open and long are in an advance. I am currently
grazing at sea level. My preference is a few hundred feet above the level of the
Hudson River in a nest provided by the Eagle and his generous side kick the
mighty squirrel. That is where I would rather be. In a room on 10th street in
the heart of the East village just west of Tompkins Sq. In a room filled with
lots of history and many secrets. A hot room. It is the hottest room in the
nation. The heat just radiates and all the toxins just march out through every
open pore in the body and the result of it all is a feeling of well being. That
is it in a nutshell. Remember the old adage to sell in May and go way. Get ready
get set……I will be on the left coast next week and will not miss a beat. Well
perhaps a beat or two. The Eagle will fly into Santa Monica to join the RAM for
a holy day. The Eagle soars while the little lamb acquires wisdom. The squirrel
minds the store and the mule gets well. That is it in a nutshell.

Jack S. Rothstein

Rothstein Asset Management, L.P.

3600 Chain Bridge Road, Suite 200

Fairfax VA 22030

Phone 888-343-4825 — Fax 703-385-7232

Email: Jack@ramhedge.com Jrothstein@jrmoney.com

Web: RAMhedge.com

Jack Rothstein is the
President of Rothstein Investment Advisory Services, Inc. and is a 20-year
veteran stock trader and a money manager.

Mr. Rothstein also writes Wealthcast, a monthly newsletter about the technical
behavior of the markets. He has been quoted on Bloomberg, CNNFn, the Dick Davis
Digest and the Dow Jones Newswire. Since 1993, Mr. Rothstein also hosted
WealthCast, a radio show in the Washington DC area covering the stock market.