It's always risky shorting high flyers like GROW, so I am using a tight stop on this trade. The setup was one that I like to use to spot weakness in stocks that have made parabolic moves. When a stock makes a new high, but RSI does not confirm the new high, it's a sign that the trend, at least in the very near term, is weakening. Here, RSI is about 10 points lower than when the stock made new highs both earlier this month and in November. The safe way to play this would be to wait for the stock to drop below the old highs. I'm using a more aggressive, and riskier, style today. The fact that the stock is stuggling on an up day convinced me to enter early.
3 comments:
Congrats on the trade. From which broker did you get shares? I tried to short GROW often but could never get shares at Interactive Brokers.
Thanks.
Wincity,
I shorted Thursday. I was expecting the stock to fall next week, but had no idea it would be this fast and this hard. I wasn't even watching Friday afternoon, or I would have probably covered half my position.
hi twin...
I've moved my blog to www.investorsparadise.com
Should check it out...it has undergone a site redesign so it should be fully operational sometime Monday.
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