I've initiated my first short trade in more than a month, not because I think this market is going south anytime soon, but I do believe that there is an opportunity to make a profit off of an obvious overbought market. As a result, I want to protect some of my existing profits without having to sell those longs and in doing so I shorted Perrigo (PRGO) this morning as it is forming a nice bear flag back into resistance from its prior breakdown level.
My entry price on PRGO is $113.26.
I'm not looking to hit a home run off of of this stock (though I'd gladly welcome it) instead, if I can net 4-5% off of this trade, I will be thrilled. If that can occur over the next 4-5 days I will jump on that immediately and will cover without hesitation.
Ultimatley this is a buy the dip market and I currently have 5 long positions, but while the market dips (assuming as much) it doesn't hurt anything to profit with a short position as well, without violating the bullish outlook that I have for this market.
Here's the Perrigo (PRGO) trade setup.
Ryan (@shareplanner) specializes in swing trading strategies and is the founder of SharePlanner which he created to help and teach others on how to trade stocks better using multiple approaches and time frames. Each day you can count on Ryan to provide his trading advice as well as transparency in every trade that he makes. Ryan Mallory resides in Central Florida with a wife of seven years as well as one lively son. More >>
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