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Looking for stocks below trend in "overbought" groups

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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

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