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View Full Version : Short DFS



Pascal
03-25-2015, 08:04 AM
DFS is a company in the Credit Card group.
It broke below the 50MA and could fall further.

The question is the following: is it better to short a bounce or to short a break down?
The answer is: Both could work.

We can see below that DFS is weak and in the lower section of the envelope.

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Now, we also see that the previous uptrend has been strong. Nothing says that a bounce will fail.

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The stock and the sector are in short mode. The general market is neutral.

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Below are the starts for shorting a bounce.

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Below are the stats for shorting a breakdown on volume just below the close of yesterday.
These do not look interesting, but...

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When we run the sensitivity analysis, we can see that a breakdown on volume with a lower entry target offer better returns. I would go for that type of trade instead of shorting a bounce.

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