Choose Longs Carefully, Shorts With Ease

I know it has been a while since my last post, and I’m sorry, but I have been very busy at work. Anyway, about Hasbro (HAS), the stock, I recently ran a search for stocks in an uptrend in the three year weekly chart, with recent positive breakouts on the daily chart in the fast stochastics and MACD’s, as well as stocks that have beaten their estimates over the past 4 quarters. Only six stocks came up, but two worth mentioning are Hasbro (HAS) and Big Lots (BIG).

(HAS) is in an uptrend not only on the weekly, but also the daily charts. On the daily charts, it is showing a nice looking bullish flag formation and is sitting near its support at around 37.25. If it breaks out of the top of the flag (also resistance which sits around 39.25) it should meet its target of around 42.

As for (BIG), I got into this stock at the end of the day two days ago and have ridden over 2.5 to its current position. You could get in now, but I would probably wait for a pull back a little closer to the 30 day MA.

As for short opportunities, they are a dime a dozen right now, especially with todays recovery rally. This week just, the NASDAQ finally broke below support, as well as the transports, making the last of the major market indices that I watch be all bearish. It’s a lovely thing if you position yourself right. I had previously made comments about shorting financial stocks like Lehman (LEH) and other financials, Chipotle Mexican Grill (CMG), and several others.

Though I haven’t back tracked onto all of the shorts I have recommended, I believe just about all of them are doing well if you had bought puts or sold short. I began trading options in the initial downturning of the housing market 2 summers ago, so I am very familiar with the patterns that are present in downturning stocks. The overall markets are all moving lower, so you should position yourself in the same manner. Take short positions, or play puts, and you’ll find yourself a happy trader over the next couple of months.

Posted in Categories: Contributor, External Research, Stocks.

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