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.
29131
Now, we also see that the previous uptrend has been strong. Nothing says that a bounce will fail.
29126
The stock and the sector are in short mode. The general market is neutral.
29129
Below are the starts for shorting a bounce.
29130
29127
Below are the stats for shorting a breakdown on volume just below the close of yesterday.
These do not look interesting, but...
29128
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.
29132
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.
29131
Now, we also see that the previous uptrend has been strong. Nothing says that a bounce will fail.
29126
The stock and the sector are in short mode. The general market is neutral.
29129
Below are the starts for shorting a bounce.
29130
29127
Below are the stats for shorting a breakdown on volume just below the close of yesterday.
These do not look interesting, but...
29128
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.
29132