Nothing Left to Short?
With the market down so much over the last three trading days, you might think that there is nothing left to short. Not so.
KOL - today I bought some KOL puts. KOL has floated back up to the top of its downtrend channel on light volume. I made money shorting it the last two times it did that. (Here is my first post on KOL.)
GLD - tomorrow I will be looking to buy some GLD puts. GLD has a classic bear-flag pattern on its chart: A high-volume plunge on Tuesday and Wednesday of last week, and a low-volume float-up Thursday, Friday, and Monday. It may not be able to get through the resistance at $92. Or if it does, it may be able to float up to its new downtrend line, which you can see by drawing a line from the peaks on July 15th and July 22nd. As long as the volume stays light, I will be looking to short it.
POT - Potash is a great company, but that isn’t preventing Apple from getting a beating, right? So, POT is a short too. It spiked down on heavy volume on Thursday, and floated up on light volume Friday and Monday. Another classic bear-flag.
Note: I didn’t have time to make charts, but the patterns are very easy to spot as long as you are studied-up on your technical chart analysis.
July 28th, 2008 at 10:15 pm
POT might be a great bet. You can maybe ski that slope now, unless it goes for a double-top, which I doubt? Keep us updated.
Yara (European fertilizer company) has started a very nice slope on the other side of the mountain.
12 month charts:
http://uk.finance.yahoo.com/q/bc?s=YAR.OL&t=1y&l=off&z=m&q=l&c=
http://uk.finance.yahoo.com/q/bc?s=POT.TO&t=1y&l=off&z=m&q=l&c=
July 29th, 2008 at 8:48 am
Baltic Dry Index down 79 (-0.9%) to 8.434 points.
That was the 13th fall in a row. (Yesterday was the 12 day in a row, my mistake).
July 29th, 2008 at 9:01 am
Hi Larry,
POT’s downtrend channel is now in its sixth week, so I’m thinking that the top is probably in. It may actually be falling along with oil prices. If gasoline falls, then ethanol becomes less competitive and maybe farmers will cut back on fertilizing crops for the ethanol market.
Matt