Short Selling Setup SNSS

Here's another short selling setup using SNSS this time. You'll see below how prices broke through multi day lower support levels and provided a good intraday short selling entry signal.

On the chart shown below, you'll see how prices acted during a 10 day period recently. The chart is displaying a 10 day period with 15 minute price bars.

What's pretty interesting to see here is that this is the same exact short selling setup pattern that occurred on another page I added about a week ago on another stock.

This is just more material that hopefully will help readers learn to be in a position to identify trading opportunities for themselves.

Okay, on the first chart below you'll see that I've added a lower support line as well as a diagonal trend line that when connected, formed a Descending Triangle.

Descending Triangle

I hope that those of you who are reading this, understand a bit about the pattern I have drawn on the chart. I say this because I came across a post on the Yahoo message boards recently where someone said that SNSS had formed an Ascending Triangle. On top of that, when I posted my chart image above, the same person replied stating that my chart was "bogus".

I'm not too sure what this older gentleman refers to as a "Bogus" stock chart, but a pattern is a pattern. Stock Chart patterns are formed from price movements in the past, so they cannot be faked or manipulated (to people with a little knowledge anyway).

Sure, you can call a pattern what you want, but in this case, a clear Descending Triangle had formed. According to most stock charting "experts", this is a "bearish" pattern in the majority of cases studied.

That doesn't mean that's always the case. As prices move near the end of a descending triangle, they could also spring higher. Especially if the normal trading volume and/or float of the stock is relatively low. In this case, news or a stock promotion could easily propel a stock like this higher in no time at all.

The next chart is one that I included on the recent Multi Day Short Selling Setup page. Take a close look at it:

Short Selling Setup

Now take a look at a continuation chart of SNSS since the first chart on this page above:

Short Selling Setup SNSS

You can see that the day after I posted my chart on the Yahoo message board, prices did indeed breakdown through support at/near $1.30, providing a nice entry signal for a short selling setup with SNSS. Although that day was a short trading day, prices remained below the previous support level.

I didn't specify my feelings at the time whether prices would move higher or lower, so I wasn't trying to bash the stock, or other commentors, only to provide what I saw on the charts. Knowing what the chart is telling you will allow you to be ready to take action if an expected move occurs.

In this case, prices broke out of the Descending Triangle - lower, and followed through a second day moving lower. So far, this has been a 10+% move lower in less than 2 trading days, so far.

From here, prices could continue to move either way. This article was to help show how looking at price movements over several days can help identify trade setups, in this case for short selling. The initial setup and trade has been fulfilled in this case. Any further trading opportunities would require additional analysis which I have not done at this time.

Hopefully the person replying to my comment and chart on the Yahoo message board has a lower cost per share than where SNSS is currently trading, and they didn't get in after it moved up 300% recently.




Return From "Short Selling Setup SNSS" To "Short Selling"


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