Failed Shorts

Last week I run a scan for stocks over $5, trading at least 500k shares per day on average and that were trading below their 20, 50 and 200 DMAs. I was looking for short setups as the market was in a down trend. I also run a similar scan looking for stocks trading above the 20, 50 and 200 DMAs for potential long trades.

The short list begun to turn all green last Tuesday putting many of those failed short setups at least above the 20 DMA. Needless to say that scan now returns a lot less stocks that meet those conditions. The market showed some impressive strength, but some how I still don’t trust it because only a handful of the stocks in the long list managed to book impressive gains or break out of previous resistance. It might be a bounce on extremely oversold conditions.

I have limited my self to enter only 5 trades per week to work on my overtrading problem. I have now  4 short (DLR, EDU, GMXR and GS)  and 4 long positions (ACF, DGP, MCD, and SLE) reflecting the whipsaw action in the market. Only ACF, DGP and SLE are in the green right now, but that balance changed almost by the hour this week.

By Friday closing I was feeling dizzy and sea-sick from the market action. If it the market doesn’t stabilize, I am going to have to get some Dramamine!

About Stock Trade Journal

The information in this blog is not investment advice. Please consult a financial advisor before investing. I have been trading stock since the 1990's and survived the .com crash. I am developing software applications to help me trade better and now I am making them available to help other traders. This blog is also a way to share my experiences and observations in the market.
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