How To Analyze Shorts

The First stock we will analyze tonight is BHP. The Monthly Chart is your daddy and dictates the macro direction of the stock.... now look at this Huge H&S Pattern. The Measure Move here can potentially take this stock down to $30.00

Next Zoom in the Time frame and look at the Weekly Chart... In this case the weekly only shows an Inside Week. ready to play out the downside. I wont bore you with the boring pic so lets go to the daily next.

• The Daily/60M/10M is where we find our Trigger price to take short. Never chase and Never Settle let the trade come to you. Always get the best possible entry or dont take the trade.

• The Back test of this Descending Trendline has been hit once making it Minor Resistance.
• The 20 Ma is confirmed Major Resistance....
• The time count is a 3 which did not reach our trigger today much better success rate on a 7,9,or 14.... 
• The 20Ma paired with the trend line makes 2 good resistance levels and is usually a great shorting opportunity.  This trade is not to be entered until a minimum of a 7 count as it as just started a new cycle up. There is a chance it goes through our resistance levels however my speculation is this... BHP may pierce the 20 Ma however most likely will not confirm above it... As BHP fights this trend and 20MA we can enter short on a 7 count with as long as we get a reversal candle that goes with it.

 


Next we goto SCCO which Is the next great shorting opportunity. Lets start with Monthly/Weekly then find our trigger price on the daily.

• Monthly Shows Inside Month and Trading below 50 Ma.

• Weekly Chart more Interesting look at this Nice BEAR FLAG 
• Inside  Week
• Below 200Ma and all Moving Averages. Also nice bearish Consolidation.

Now to find our Trigger on the Daily...

• SCCO is on a 4 count, Must wait for a 7 count or 9 count into the 50Ma or lets see if the 20Ma will hold ....
• No confirmation above the 20 MA YET... Must have a 2nd close above the HIGHS of the Breakout Candle to Confirm the 20Ma as support.
• Wait for a Reversal Candle or the 50/200Ma to Enter a Short on this SCCO.