We covered the long side yesterday, so today I’m going to go over some short ideas, particularly in light of the fact that technicals were diverging today, with the markets firm and underlying technicals showing weakness.
Dollar Thrifty Auto Group (DTG), after rolling over hard from 27 1/2 down to 17 1/2, a 10-point drop in about a week and a half, has bounced, but very feebly, with no increase in volume. Underlying technicals rather weak, and although there may be some room up towards the 21.90–22 zone to complete more of a symmetrical look, it looks lower to me. The next target is 151/2. Beneath that, something around the 11–12 zone is doable, potentially.
Goodyear Tire & Rubber (GT) had a big spike down a couple of weeks ago. Nothing more than a bear flag since then. Very low volume. Negative technicals. Targets are 10 and 8.
Schnitzer Steel Industries (SCHN) has broken down and rallied back, very similar to some of the others. Formed a bear flag. But the technicals have barely moved. Actually gone lower on the On-balance Volume (OBV), which is an indicator of distribution. Very poor technicals as well. My targets on Schnitzer Steel are down about the 33 area. There’s a stop potentially around 39, and eventually maybe even something in the mid 20s.
Lastly, Valmont Industries Inc. (VMI), similar action, has rolled over, come down hard and bounced back up to triple resistance around the 80 zone. Today it was down 2.26, showing very poor signs that it wants to do much more than eventually go lower. Looks like a new down trend channel is forming. The bottom of that channel around the high 60s for about an 8 or 9 point drop, and a target down eventually around 61 or even as low as mid 50s. It’s potentially doable depending on the market.
Abaxis, Inc. (ABAX), which is on the Boxer Shorts list, looks like it’s a 20.00 stock short term and around the 18 1/2 area is likely. Several other stocks in Harry’s chart analysis today are Expedia (EXPE), which came down hard, then bounced, reversed and came back down. It could see something around the 20 area, even 17 or lower. Navistar International (NAV) came down in a 4-wave decline, and a fifth could take it down towards the 30–31 1/2 range. Pool Corp. (POOL) is down 33 cents at 20.10 and may drop even further in the near future.
So that’s it for the shorts. Be sure to listen to Harry’s Chart for the Day to get the details on all of the stocks mentioned today.
