EOM Trading Tuesday 9.27.16 SHLD

Selling yesterday-buying today. The SPX closed at 2159, within our range of 2170 and 2119.  What is around the corner to get the SPX out of this trading range?

Today I audit a previous “Trading Tuesday” feature, SHLD from August 18, 2016. You can find the original post in the “EOM Members Vault.”

On August 10. 2016 I introduced you to a new group in the Playbook 2016/17, the Altman Z-Score group. I included this group for possible short candidates.

From my 8.10.16 post.  “According to this 2000 study, the Altman Z-score successfully predicted bankruptcy between 80 and 90 percent of the time up through 1999. Tonight I feature the “Worst of Breed,” of the group.”

Here is a link to the current performance returns of the group. The slotted red line represents the date of publication.  Can you spot another short candidate?

On August 17, 2016, I introduced you to SHLD and stated the following;
“Currently, SHLD is close to receiving a Simple Simon Sell Signal. All that is missing is a trend-line break. If deciding to take a short position, make sure you have a trailing buy-to-cover of at least one dollar. Be aware that SHLD reports earnings on Thursday, August 25, 2016.”

Tonight I tip my cap to those who followed the Simple Simon Sell Signals and are wondering where to lock in their SHLD profits.

Here is the current SHLD chart.  The slotted line is the date of the previous post.

Key Points on SHLD…
1.   Four days after my original post a SS Sell Signal Hit
2.   Is currently down 32%
3.   CMF is still trading negative
4.   MACD Histogram is trading negative but is improving
5.   RSI and Slow Stochastics are still overbought

The short trade is up over 31%. Where do you want to begin locking in profits?
1.   Consider a protective stop above the 5 SMA, above the 10 SMA and another above the 15 SMA.
2.   If one is hit and the price reverses, you still have skin in the game.

Let’s do the math. One hundred shares at $16.00 per share would be a $1,600 investment. If you bought to cover (BTC) at $11.00, the trade would have netted $5.00 per share or a 31% return minus commissions. 

This is $500.00 per one hundred shares shorted.  Profit from two hundred shares (shorted) would have paid for one year of a EOM membership with plenty to boot.

The bottom line…
1.  Read each post daily.
2.  Learn how to use the Simple Simon Buy and Sell Systems
3.  Learn how to set protective stops
4.  Learn where and when to take profits
5. Take some profits and enjoy yourself to something special

Finally, don’t get greedy. You have not made a penny until your buy-to-cover order is executed and ALL profits are locked in.

Enjoy your evening,

David O. England

Plan your work, work your plan, and share your harvest! Philippians 2:3-4

This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.

DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.

If you have a question or comment, contact David England at eyeonthemarket@outlook.com.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *