A reoccurring theme here is to buy green candles and short red candles especially when they are making new highs or lows. But after a while you get be pretty good at spotting the false moves. This chart presents the case.
At the time (and I had been watching and waiting) the candles happened I thought it smacked of desperation. A move that had all the hallways of a genuine move with a big candle and lots of volume. The thing was, it was in the wrong direction to the general sentiment of the markets which is down. This is the thing to key in on. And although I can't tell you why because I don't know myself, it just screamed "short opportunity" to me. It just seemed obvious.
Chart is PCLN swing short entry. PCLN quickly moved lower and stop was never threatened.Its $12+ lower today. PCLN is an internet travel company with a $300 stock. The words irrational exuberance come to mind. Anything can happen but I am betting it goes lower. If I get stopped out I would be looking for another good entry point to short it as I think discretionary travel #s will drop.
I remember a few years ago when CROX shares were not far off twice as expensive as GE. Yeah, plastic shoes, thats it. The future economic engine. I'll trade the hype with the best of them but eventually reality set in and I want to short it.
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