GILD: A strange short idea

GILD is an interesting case to study.
We can see that this is a leading stock.

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The pyramid data tells us that it is OK to short the stock. The question is: is this such a good idea to short a leading stock in a market that broke to a new high?

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Let's first test a shorting strategy on a breakdown below $100, which was the low of the past days.

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The stats are not very encouraging! This is typical of leading stocks: oversold levels have attracted buyers. GILD is a stock that likes to reverse back and go to a new high. Hence, shorting a breakdown could work against us. At least it did work against the strategy in the past 300 days.

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If we want to test a shorting idea on a bounce that stays below the 50MA, then we should use only 20 days as analysis period, but this is far too short. Hence, I used the 300 days to see how the stock reacted in the past, even during the strong uptrend.

We can see below that the results were good. This means that there is a possibility to short a bounce here.

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We can see that the results still look good for longer holding periods.

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The Table below shows us the short limits.

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