4 stocks to short, even if the market moves higher
You can profit in any kind of market if you are on the right side of the
trend.
The key is having the ability to recognize the stage of trade relative to the
short, intermediate and long term, or over 10, 50,and 200 days. The following
instruments provide opportunity to capture gains selling short. That is the case
because the charts that will be examined indicate that the one thing all 4 have
in common is a declining price pattern. If you are short a stock and the price
of the stock falls in value, then you are gaining. It is a great way to hedge
long holdings. Sell short those instruments that have completed a top formation
and begin the declining stage of trade. Now let’s get into a few good shorts:
Marriott International
(
MAR |
Quote |
Chart |
News |
PowerRating) 62.42
I don’t see how you can have a
fighting chance winning at this game if you don’t have the ability to hedge by
selling short. All stocks move in cycles. The pattern of trade is similar but
variable depending on the issue and the timing. Today hotels are in trouble
after delivering a stunning advance last year. MAR is heading south. The stock
is actually up over 30% in the last year and is flat thus far this year and
ready to dive into a more serious drop that has whetted bearish appetites. MAR
is a timely short. Don’t believe me! Let the chart tell the tale. I invite you
to examine a chart both daily and weekly and check out the completion of its top
formation. The stock is currently in decline. The decline just began. It trades
below all key inflection points. It is a timely short. So is HLT. The hotels as
a group are coming off a major advance that has ended. The bull market is over
for them. Selling short is the way to benefit if you choose to get involved. I
am selling short up to its 200-day moving average at 65.06. Any stock that
trades below key inflection points like the 200-day line are controlled by
bearish claws. MAR is in the process of being clawed and driven to lower price
zones. The decline just began. The best time to short a stock is at the outset
of a decline. Place the stop at 65.50.
The Hershey Company
(
HSY |
Quote |
Chart |
News |
PowerRating) 58.38
If you are currently long HSY
the sweet feeling is beginning to turn bitter. If you own the stock then you
know that that is true. Don’t you? Lets be objective about the circumstances
that surround the action in the drama of this candy company these days. The
action around the stock is bearish. No question about that. The advance that
began in January 2004 ended a while ago. The major top is complete. How do I
know that? The stock currently trades below all key inflection points. It is in
the hands of hungry bears that are using this instrument to satisfy it’s craving
for something sweet. HSY is no longer sweet and it is inevitable that the
bittersweet flavor delivered today turn sour soon. The stock could be shorted up
to 60 on a rally. The 200-day line currently trades at 60.53. The stop ought to
be placed above that line. Having the ability to short weak stocks and at the same
time be long stocks in a healthy advance is a workable way to build wealth.
Place the stops above the 200-day line.
Yellow Roadway Corp
(
YELL |
Quote |
Chart |
News |
PowerRating) 46.01
This stock will drop this
morning. It is already indicating a drop of nearly 6%. The stock is in decline
and that is what happens to stocks in decline after lousy news is released. The
typical reaction to bad news in a declining stock is further erosion and a
groping for the bottom after getting the life squeezed out of it. Where is the
bottom in YELL? It’ll likely test the 40 zone. That is where the next layer of
support is. I am currently short the stock. I won’t be adding to it right way. I
will be keeping what I have if the stock shows little positive energy. There is
little buying and mostly selling and the pressure to sell is forcing lower price
points. Perhaps that will occur next
week. Keep an eye peeled for a bounce in below average trade then pounce on it.
Place the stop above its 50-day moving average at 51.35
Boyd Gaming
(
BYD |
Quote |
Chart |
News |
PowerRating) 48.08
I just sold this stock short
yesterday and it appears ready to take a major tumble, doesn’t it? It is
incredibly classic and clear that the indication is a further slide. Its what
the eye observes objectively after examining the chart. BYD enjoyed a major
advance as most hotels and gaming houses over the last year and it is over. The
top is complete and the stock is ready to fall. The short is timely. The stock
bounced over the last few days to adjust an oversold condition. The
risk to sell short is low.
Jack S. Rothstein
Rothstein
Investment Advisory Services, Inc.
3600 Chain
Bridge Road, Suite 200
Fairfax VA 22030
Phone 888-343-4825 — Fax 703-385-7232
www.jrmoney.com — www.wealthcast.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.