Discussion in 'Stocks' started by riskfreetrading, Aug 8, 2008.
I am considering starting shorting McDonald. What do you think?
The stock is making new highs in a bear market.
Why would you short this stock? Plenty of weak shit to choose from... why play hero...
I think I understand you point, but I must say that I like shorting at the top. That is the short answer.
When is it the first time a stock becomes weak? Answer: one tick immediately after the top.
When is the last time a stock is strong: Answer: one tick immediately before the top.
Therefore shorting at the top is by definition going AGAINST the trend. It is dangerous indeed, but is delighteful/profitable if done right and held for a long time.
I have done a quick look, and I think we are at the top technically and fundamentally. But I need to study it further/indepth
Other comments please?
i understand your wanting/temptation to short it from the top but it is more prudent to go long on it after a pullback.You are merely guessing the top and since it is breaking thru old resistance to new highs it probably will go to 65 before any pullback...
I agree with Kid, shorting an equity in a bear market that is making new highs is suicidal.
Why don't you short a weak stock in a weak sector instead ?
Mcdonalds makes more profit in bear market (cheap food), fundamentally you might commit suicide
Thanks for the comments. My current assessment of the stock based on above comments is that I should short it. But I have capital tied up, and I have not finished analyzing it yet.
Fundamentals: MCD makes money from foreign markets. Dollar is up, which means earnings will go down. If you add a recession in europe/restofworld, earnings will go further down.
If earnings are down (and since it is now pricing earning growth), the stock must fall.
Because a stock starts its weakness at the top (one bar after the top), and also because the most money is made shorting at the top and holding for the move to finish its course.
Plus if I short it, I will hold a call for protection.
mcd +3.00$ today alone at 64.80...care to guess a top?If europe is going into recession then more people will eat at mcshit also just like here in the us, right?
I just started scaling in to have a feel for it. I put in an order to short it in the 66 ish area.
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