Pretty good set of rules, John. Particularly the 90% threshold for institutional satruration. I'd include seasonality. Institutions trying to play catch up for a lackluster year. Taking the bait. High short interest is identified prey to the ax. Predictable, especially when over-leveraged. SNDK isn't exceptionally high but it's present. There is also the notion that one trades against a market maker, NOT insitutions. He/they have an agenda, Generally related to inventory. Just because the ax shorts intra-day (in some cases more than once), doesn't in any way make it a short candidate for retail money. Retail isn't than nimble nor has the luxury of seeing lined up potential order flow. Level II is bells and whistles. Lastly, the chart I posted reflects BOTH short term money and..............long term money. One glance, it's not a short. Well, at least not for more than chump change.
Few more rules for intraday shorts,stock has to open lower than yesterdays price,and it has to be lower than todays opening price,otherwise you are looking for trouble.
Couple more things. Don't mess with stocks that don't have options and or low float. This is because they behave differently then high float stocks with heavy option trading. The worst nightmares are created by shorting cheap stocks with low float with low institutional ownership on market trend days. My shorting and buying of stocks up/down big has always been just a mean reversion deal for me. I have certain distances the stock has to go for me to get interested. I have based the distances on those that are extreme relative to what is normal moves for the stock. It really doesn't matter how you come up with it but come up with some measure of movement, either on % up/down or Range on day etc that only occur maybe 1% or less of the time. The 1% is just an example. So say you want to use % up on day as the metric. Download 200 days of data on that stock and get what the median % up is on up days and then get the Std Dev. If the median is 3% when the stock is up and the Std Dev is say 2% then come up with a threashold that you feel comfortable with. For instance, say 15% up which is 6 std dev etc. If you want to use 7 or 5 std dev then just adjust etc. Most important though is that you really need the big up/down day to run into some type of resistance/support on the longer time frame charts. Another gimmick is using options. Go to the option that you are interested in selling and put it on a daily chart. Look for where that option on the daily chart will hit resistance. It generally is a good place to sell. John
Seems to me there are a large number of posts trying to justify a short based upon the number of days up in a row a stock is up.... I have never made a trade based on such logic. The question is... where is the resistance. Leave an order just past here to catch the pikers getting stopped and move on to the next stock. There's only 50k others to choose from. Besides, there's been no panic. This thing isn't ripe yet.
why would you ever look for a short in this stock at this level? You missed the boat by many days. Even if the stock pulls back some, your risk reward is fully skewed against you. Dec 3 was the day to go long this beast, and I admit I also missed it. But looking for shorts now simply makes zero sense. Why dont you concede you missed it and move on to other names. On the close of Dec 3 my models show me that the relative outperformance was confirmed and a long was in place. From here I see some correction but there is no reason why SNDK should not continue to outperform the broad market after that. So why would you look for a short in this name and not weaker names thats what escapes me completely.
Next resistance point I see is in the $32-$33 area, but the stock has made new 18-month highs and has been pummeling earnings estimates for the last 4 quarters. They also won't need to do much to crush last years EPS (-1.65) when they roll out their earnings in January. I'm guessing we'll see a pullback with the general market, but I'd be nimble with my shorts here.