Option Investor
Market Updates

Looking for stocks below trend in "overbought" groups

HAVING TROUBLE PRINTING?
Printer friendly version

Bearish traders that are looking to short stocks or buy puts would be well served to look for stocks that are trading below longer-term trends as characterized by the bearish resistance line. If you can find some stocks that are trading on a sell signal and have bearish price objectives that give the stock some room to work to the downside, then that's also something that should work in a bearish traders favor. Those technicals as it relates to the stock along with the bullish percent indicator being in overbought condition (above 70%) and reversing lower, that should only help increase the odds of a stock you're shorting find lower ground. Many of these characteristics are things PremierMarkets.com found in shares of Intel (NASDAQ:INTC) this morning when we profiled the stock as a full position short for the PremierMarkets.com profiled portfolio.

Intel Corporation - $1 and $0.50 box.

The only thing positive on the point/figure chart for INTC is an upward trend I have drawn on the chart. A trade at $27 would violate that trend and a trade at $26 would trigger another double bottom sell signal. Since we'd avoid this stock as a bullish candidate, we've added it as a bearish candidate this morning at the opening of trading.

Jeff Bailey
Senior Market Technician
www.PremierMarkets.com

Intraday Update Archives