As I have time tonight and Sunday, I’ll add to this list of charts. I hope to get a dozen or more setups posted. These setups will be stocks that are rolling over and trading beneath their 50 day moving averages. We want stocks where the selling has already begun some time ago with momentum building to the downside.
The honey hole is indicated on these charts. This is the optimum place to get short. Selling any lower than the honey hole can result in pain as you get squeezed during the obligatory oversold rally. Undoubtably some of these stocks will not rally to the optimum spot. Patience will be rewarded by granting you entries closer to resistance rather than at support.
 We’ll start with [[GOOG]]. If you have big ones, why not take down the mother of the tech rally? A retest of the 50 day will provide an excellent place to get short. A big break of 650 will move the honey hole down to that area of previous support.
Next up is [[DECK]]. While this stock is fresh off 52 weeks highs, I’ve included it due to the company’s exposure to the likely decline in consumer spending. Because it has not been rolling over for some time, beware that there may be some asshole dip buyers left who have just been chomping at the bit to buy any dip.
Let’s look at 2 setups from the red-hot Aerospace/Defense sector.Â
[[ATK]] is offering up itself for the taking with a breakdown beneath its 50 day average and the violation of a year-long trend. Again, the honey hole is where one would short, optimally. It is possible the stock trades back up again into the triangle and well above the HH. Patience is the key here, although this one is not nearly as oversold as many others.
[[ESL]] is breaking down out of a 4-month triangle. With a declining 50 day average acting as resistance, this setup looks sweet. Be careful though, the 200 day average is rising and there are some bullish divergences in the indicators.
Everyone knows the Chemical sector, housing such leaders as [[MOS]], [[MON]], and [[AGU]] has been on fire. Here are some setups from that sector. Remember, we aren’t looking to take down the strongest from the sector. We want to be in the weakest names when the leaders start to get hit hard.
[[ALB]] has been rolling over for 2 months now. It looks like it may breakdown out of a triangle formation. As it is trading beneath both the 50 and 200 day averages, this stock makes a great candidate.
[[FTK]] experienced a high-volume sell-off, and has never recovered. It is now trending downward, bumping its head on the 50 day average. This is a good setup, but the stock is approaching support and the 200 day average. Watch those areas for a rally. Ideally, it will crash through support, and previous support will become resistance.
[[FMC]] looks good here as it is one of few stocks that is not oversold. This setup is close to resistance and a long ways from any support.
The next sector we’ll peruse for short setups is Manufacturing.
[[PCP]] has been trying to roll over for several months now. I’d like to see this bounce and once again fail at the 50 day before selling it.
[[EMR]] has just broken a strong uptrend and has made a lower high and a lower low. As you can see, the honey hole is placed right beneath the uptrend line and right at the 50 day average.
From the Consumer Durables, Appliances sector, we have [[SPW]]. This one has a long way to fall, and I like the breakdown from the triangle pattern. Look for more resistance at the 50 day.
Another one I’ve been watching is [[CLB]]. I believe it would be housed within Energy, but I’m not sure. I just like how it is setting up. It is one of few stocks that is more overbought than oversold. Accordingly, it has been popular, but the failure at the 50 day average after the high volume drop can not be ignored.
From the Heavy Construction sector, we have [[LAYN]]. Again, the same theme applies: 50 day as resistance, and a break through the 200 day average leads to a large fall.
Finally, we have [[GHM]]. This stock is in the metals fabrication industry. Although it has a long way to fall, be careful this one as it may have some fight left in it. However, if it fails right here at the 50 day, well then you know what to do.
Well folks, I’m running out of time tonight. I’ll be posting more setups throughout the week ahead. Hope you can bank some coin from the setups here.
Full disclosure: I have no position in any of the stocks I’ve posted here.
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