As I have been noting, any shorts I take here are bound to be mega caps with very low short positions in the float, to avoid falling victim to one of these vicious squeezes we have been seeing.
Visa is the most heavily-weighted Dow component. And my short position is slowly moving in the green as the stock breaks under $210.
The thesis is fairly simple, with the weekly chart below showing a potential lower swing high and a potential rollover to new correction low. That said, I have a fairly tight cover stop here in the event we see a post-Fed melt-up.
Still, I am content to be focusing any shorts I take on relatively safe stocks, as opposed to getting a face-ripper in some of the high beta names.
The time to short the high flyers is when we transition into an established bear market, as they are under steady distribution then.
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Chess,
Sage advice. The beta bubble has popped. However, nothing goes down in a staring line. The beta plays are being squeezed because hedgies that were long in March went short in May. Given their low risk tolerance for draw downs they will likely cover. You, Fly and others have masterfully played this. The hedgies are too big to be nimble like they were in the last bear market. The little guy can crush the big guy because there is no liquidity out there.
Good points, bluestar. Thanks.
I am considering reloading on AMZN short. Low short interest and sell the news product launch today. I will wait to see Fed action. Is this stock on your list of potential shorts? Long term I think this stock is screwed but timing is everything on a short.
AMZN is definitely a candidate. The longer it holds under the 200-day the sooner the 200-day will turn lower which, to me, would be a major bearish signal for this leader. It has stayed quite weak relatively in recent weeks, too.