Stock Market is getting extremely overbought, and news of the “umpteen-trillion-dollar”stimulus plan is likely already priced into the markets, there are some descent shorting opportunities beginning with Aqua America (WTR) and Royal Gold (RGLD) other stock worth noting, but won’t be detailed here are Emergent BioSolutions (EBS) and Finish Line (FINL). Each one of these stocks represent excellent swing trades to the short side. So lets dig in:
A couple of charts for shorting:
What’s not to like on this one – WTR is trading sideways above the 50-day moving average since early November and is finally starting to show signs of breaking down. Closing right above the 50 day moving average, this stock is ripe for the picking. Should it break yesterday’s lows, we should see some significant selling that pushes it down to $19 range before encountering any further support.
RGLD is another good stock that has benefited from the rise in commodities – namely gold. However, over the past few weeks, this stock has started to show heavy distribution, and should see further selling. We would likely use a setup of a break below today’s lows, followed by a stop above the high of today.
As with all trades, and particularly in the current market environment, use caution and tight stops – take a loss before it gets out of hand.