Short Ideas for Wednesday

Stocks continue to trend higher, and dip buyers have shown no reluctance to step up when required. Underneath the stock market action yesterday, we can see that the US dollar lost ground on increasing volume. Oil, gold, and silver were particularly strong yesterday.



The move in oil looks particularly bullish here, definitively breaking out of a downtrend with high volume.



At some point we will get some profit taking, which will set up charts for better risk/reward on the long side. There are a good number of charts that are starting to look good for short trades, most in consumer and technology sectors. I am looking to start phasing into some short positions starting today, while allowing for a continuation higher in the broader market.

- AMR: With oil rallying, the rationale for buying airlines is greatly diminished. We still have a slowing global economy, and these stocks are way above their yearly highs.



- CAL has a double top in place, and was lower on increasing volume yesterday.



- SBUX is running into the 50 day moving average, and was also lower on increasing volume yesterday.



- THI looks a lot like SBUX, in the same sector.



- RLRN is still in an uptrend, and is in a sector that has been particularly strong lately. However, price repeatedly has had trouble getting through the 15.00 area. The October low is 6.00. I am not looking to get into this one right away, but it is high on the watch list.



- PFCB is the type of restaurant chain that relies on discretionary spending by consumers. I would look to short as it gets closer to the 50 day moving average.



Quite a few retailers are looking like they are nearing the end of their run.

- SCVL is nearly 40% off its lows, and is approaching the 50 and 200 day moving averages from below.



- JNY looks ready to resume its downtrend after a brief pop on average volume following recent earnings.



- SPLS



- GPC



- BIG



- BBBY



Here are a few short ideas in the technology area:

- MCRS has not participated in the rally, and reported earnings a few days ago.



- IWOV sold off after earnings, and has retraced to resistance on lower volume.



- BDC also saw a big drop after earnings, and is hitting a trendline.



- JNPR is another one with a poor reaction to earnings last month.



- EBIX has not seen much volume in this move.



- CRDN saw a poor reaction to recent earnings, and has rallied on decreasing volume.



- PWRD looks like it may be stalling here.



- SYT is hitting resistance as volume is decreasing.



Some from the building sectors:

- FAST has some potential to move higher here, but I would look to short closer to the 50 day moving average.



- MTH: I am already holding puts on this homebuilder.



- HW: They did not like the earnings report yesterday.



- LDSH has resistance here.



- LUK: Volume is decreasing on this move.



I have a number of long picks that I will place in a new post.