How To Short HOT Crashing Stocks

[RagingBull Elite]( Dear undefined— Jeff Bishop here, It’s official: The Dow Jones just closed above 30,000 for the first time in history yesterday. The S&P 500 set all-time highs yesterday too, closing at 3,635. At the moment, the market seems to be celebrating more positive vaccine news as well as confirmation that Janet Yellen— who previously oversaw big economic expansion coupled with low-interest rates — might be the next Treasury secretary. With market valuations this lofty, and with a new President transitioning into office, it’s only natural that we take a moment to pause— a few of the hottest sectors, including EVs, have been in complete euphoria. As traders, we want to avoid having FOMO and getting dragged into stocks that have made overextended moves — at some point, they’ll have pull backs. Heck, we’ve already started to see this happen. While our overall bias at RagingBull is still bullish, in today’s issue of All-Access we take a look at [stocks that look attractive as shorts at these levels.]( Chart of the day is DPW… Again! This time the trade was on the short side though. Yesterday marked the first day when the entire EV sector finally took a breather after going parabolic. Stocks like BLNK, FCEL, AYRO, and many other EV related names all closed lower in a volatile session of trading. And DPW was one of the most epic opportunities of the day. The stock dropped 33% from the open of $9.5 to the close of $6.31 during the trading session. In the morning, DPW gave multiple indications to where it was headed for the rest of the day: - First it broke below VWAP - Then it broke below the open of the day - It got halted to the downside After those 3 things happened in 10 minutes, it was pretty clear that the stock would close much lower. But even if you missed it then, there were other spots to get involved in the short as the day progressed. Here’s a brief intraday chart analysis for you: As you see on the chart, there were at least 3 entry points with high odds and good good risk-to-reward ratio: the entry around the halt, pullback to VWAP and bear flag breakdown. Familiarize yourself with the clues above, it might help you take advantage of the next short opportunity. A lot of beginner traders get intimidated by shorting, it seems to be too complicated and too risky. However, learning how to short— especially with the help of [one specific crashing stock pattern](— not only can be lucrative but is sometimes necessary to be profitable in nearly any market environment and take your long game to the next level, in my opinion. It’s not often that you hear us talk about short ideas. We don’t avoid them per se… But, trading is a numbers game— and, longer term, the numbers simply aren’t in shorts’ favor. See, the economy’s natural tendency is to develop and grow, and so is the market’s. Stocks simply go up a lot more than they go down— just look at any index chart of the past few decades. Out of mere practicality, we much prefer to ride the wave, not fight the current. However, great short opportunities do happen, and they happen quite a lot. The greatest part about them? They don’t require a weak market. Individual names can drop like rocks for a number of fundamental or technical factors. Today’s issue of All-Access is for Bears, and here’s why: - You may be uncomfortable going long at these levels and rightfully so. Playing the short side or simply hedging can provide some diversification to our overall strategy in this environment. - Overextended sectors come down, just as quickly and dramatically as they go up. There’s no reason to leave that money on the table when lots of stocks are overextending as we speak. In fact, [Jeff Bishop himself is rolling out his newest offering yet, focused on short plays specifically.]( EVs overextension is the main reason some traders, including myself, started looking at the short side. All bubbles burst— and when they do, the downside is quickest and often bottomless. To be clear, we’re not implying anything about the businesses, we’re simply pointing out that no current fundamental factors support 5-30x moves in a matter of months. The broader sector finally hit a solid roadblock yesterday. We’re not convinced or biased yet, but we will be looking to short any continued weakness. Let’s dive right into it: Nio Inc (NIO): - Nio might be the sector’s biggest star— it’s up close to 14-fold YTD and 100% in the last month alone - Yesterday, the stock failed the Monday’s breakout, erasing most of the gains and closing weak below VWAP - The key level we’re watching is $55— key resistance area on Monday that we slipped right back under. Any sustained hold below it is bearish for further downside. Blink Charging (BLNK): - BLNK is not an EV manufacturer, it’s a provider of charging infrastructure. However, its shares are up nearly 20-fold YTD and 300% in the past 30 days. - Yesterday, the stock was one of the weakest performers across the board— it might finally be at the turning point - Key level is $32.50. If we don’t snap back above it, the pressure would be to the downside. BONUS - Lyft (LYFT): - Lyft isn’t exactly an EV stock, but we’re confident we don’t have to explain what the company does - While it’s biggest rival UBER and the market itself pushed to new all-time highs and higher, LYFT is steadily stuck under long-time resistance of $41 - As long as that resistance holds, the stock can easily drop back down to the lower end of the range at $25 The two electric vehicle stocks we mentioned in our Battle Plan section are examples of stocks that are looking overextended to the upside. When stocks are in the middle of explosive uptrends in hot sectors and catching lots of headlines, there’s always the possibility that the move has been an overextended move and the stock is due for a pullback. When the pullback starts to happen, it’s the shorts opportunity to jump in— granted that they exercise appropriate cautions with stop losses in place and avoid getting lured in the trap of a short-squeeze. We can sell into the momentum of an actively declining stock. But there are also 2 other strategies that we want to mention here that can help traders decide when to get short on a stock: - Selling the snapback during a downtrend - Waiting for a breakdown within a well-defined trading range (established by clear support and resistance levels) A lot of traders are under the assumption that short-strategies only work well in bear markets, but they can be equally as profitable in markets with uptrends as downtrends. The truth, as you have inevitably found out in your own trading, is that we see stocks crashing every single day in the market. The challenge is figuring out which stocks have the most downside potential and how we can make short entries into them. [Register now to watch and receive a free report]( where Jeff Bishop shares the one pattern he uses to identify crashing stocks. [The Hottest Semi Stock Yet?]( By JC Parets of Chart Hunter [One SPAC-tacular EV Stock I’m Watching]( By Ben Sturgill of Daily Profit Machine [My SFIX Option Play to End 2020]( By Nate Bear of Weekly Money Multiplier [This CGC Chart Pattern is a Profit Machine]( By Jeff Bishop of Total Alpha RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 [Click Here to stop receiving emails from support@ragingbull.com]( [Unsubscribe from all RagingBull emails]( DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at [(. FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. AnyRagingBull Service offered is for educational and informational purposes only and should NOT beconstrued as a securities-related offer or solicitation, or be relied upon as personalizedinvestment advice. 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