Why I am shorting PG...

T

Trend Fader

Stock is breaking down off a beautiful pattern. Volume was also pretty high for today's breakdown.

I am short PG as of tuesday close.

PG could pullback to 85.5 which is 50% retracement of the move.

Check out the simple chart attached..





--MIKE
 

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I am beginning to test my model on US stocks (I have already done in the past for a few french stocks).

The calculation is made after the top of 22 April.
66 base min base: 85.18 proj: 82.90
111 proj min base: 85.30 proj: 82.67
1 base max base: 89.99 proj: <B><FONT COLOR=GREEN>90.84</FONT></B>
17 proj max base: <B><FONT COLOR=BLUE>89.18</FONT></B> proj: <B><FONT COLOR=GREEN>95.05</FONT></B>

The dual base of the max target of 95.05 is equal to 89.18 (a base on my model is a sort of equilibrium zone whereas a target is an unstable or chaotic price zone) which is the lowest horizontal line. It is when the high nearly fade towards this zone that the break occurs. And magnificent synchronicity the traditional TA trendline intersects with my price zone at that moment :D.

<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=254589>
 

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Quote from Trend Fader:

Stock is breaking down off a beautiful pattern. Volume was also pretty high for today's breakdown.

I am short PG as of tuesday close.

PG could pullback to 85.5 which is 50% retracement of the move.

Check out the simple chart attached..





--MIKE
More...

like your work, its paying nicely
 
I expect the stock to wiggle and jiggle.. because PG is not a smooth trending stock on the daily chart... but the breakdown is still severe..


--MIKE
 
Quote from Trend Fader:





90ish... basically somewhere in the middle of the pattern
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Why 90ish? What significance does a stop in the middle of all that (daily) noise have?

It's your trade and your call, but if I was shorting PG (and I wouldn't) I'd be looking at at stopping out at 92 (or, preferably (for a longer term trade), at 95).

If 92's too high, reduce your position a little, so that you can give it the breathing room it needs (imo).

Well, you've probably got plenty of time to think this one through -- I don't see it going to 85 in the few days or anything, at least not without some major market cooperation.
 
quote from alphonso :

It's your trade and your call, but if I was shorting PG (and I wouldn't) I'd be looking at at stopping out at 92 (or, preferably (for a longer term trade), at 95).

If 92's too high, reduce your position a little, so that you can give it the breathing room it needs (imo).
More...
Excellent point !

IMO at 92+ it would be obvious that your analysis is proven to be wrong; so that's where I'd put my stop. If the amount of money that you're risking is too much, then it would be better to reduce your position (500 shares vs. 1000 shares for example) than to lower your stop to 90 and get stopped out of a solid trade, based on good analysis.
 
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