What I Look For In Picking A Short Reversal

When I look for potential
contra shorts I like to have both technical and fundamental evidence that
suggests the tide may be turning.

In today’s trade, one such candidate was
Symantec (SYMC)
. Over the weekend I noticed that a daily topping pattern
known as the 1,2,3
was being formed on negative technical divergence–as MACD looked to be
weakening, volume was pointing at distribution on recent down days, and the
issue was showing a D+ distribution ranking (courtesy of my dailygraphs
subscription).

…now all I needed, was sufficient intraday
evidence to start feeling ‘secure’ in finding a possible short entry for our
subscribers.

10:06:11


Intraday Setup Alert

Symantec (SYMC)
has established an
 Opening
Reversal
TrapDoor top–up .73 at 49.44. The issue is showing a potential
daily chart

1,2,3
top in place, with negative divergence–which lends support to
possible intraday shorts.

10:58:41


Intraday Update Alert

Symantec (SYMC)
has put in a potential


1,2,3
top on the 5-minute chart–up .94 at 49.66. Short reversal entries are
set below 49.44.

13:23:27


Intraday Update Alert

Symantec (SYMC)
has put in another potential contra trend short entry–up .78 at 49.50.

Today’s intraday trade has established a symmetrical



triangle
on the 5-minute chart. Potential triggers are set below pattern and
pivot supports of 49.36.

As it turns out, there were plenty of ‘secure’
reversal set ups–they haven’t gone very far yet, but there’s been some intraday
coin opportunity–and truth be told, I’m feeling secure the third time might be
the real charm.

Chris Tyler