One New Short Position For Thursday’s Stock Market Session

February 20, 2008

The short scans were very thin tonight after the bullish close the indexes staged but within the small amount of candidates one did stick out as a possible short. That stock is PRE and it does look like it is ready to rollover and crash below the 200 day moving average. But if it does not, we have our cut loss very close by that will prevent us from suffering any significant losses. If you are a newbie and do not have a personal history of making money on the long side of the market, you should avoid going short PRE. Be careful with shorts at this exact moment as the market is still in a slight uptrend off the 1/22 lows.

new short position: PRE

PRE is breaking down at the downtrending 50 day moving average, on very strong volume. The stock has rolled over very slowly but after today’s gap lower and weak close on very strong volume it now looks ready to attack 2007 lows and then hopefully the 2000 lows by the time the selling is done. There is no red BOP on the chart and besides the two heavy distribution days in 2008 there really isn’t a whole lot of selling in this chart. Therefore, this is not a good short to load up on and newbies should probably avoid going short this stock. Cut your loss with a close above the 50 day moving average, if the stock does not move lower immediately.