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Sunday, September 11, 2011

Noble - Short Setup

The Dow fell 303.68 points, or 2.7%, Friday to 10,992.13, leaving it with a weekly drop of 2.2%. Asian market is likely to gap down on Monday and faced strong selling pressure.

Although it is going to be the shortist's world where you can short any counter, it is safer to choose stocks that has a proper setup to short since many stocks have already plunged on Friday when STI loss 31.8 points or 1.11%. Noble looks set to be a good candidate because the stock touched the 40MA with a doji and reversed. This has been the pattern the past three occasions where the stock retreated after touching the 40MA ( see red arrows ).

IndoAgri did attempt to breakout on Friday but failed to closed higher. As a matter of fact, the closing candle was a shooting star which has bearish implication. This could be another candidate to short too.

PS : It is vital to stay vigilant while shorting since the STI has already plummeted by 1.11% on Friday ahead of the 303 points fall in Dow. The bulls may fight back at some points during the day.