SGX Stock Charts

My final type of short is one that can send shivers up your spine. This is the type that should be labeled, "For advanced traders only!" But, in reality, it's just the exact opposite of buying on a dip in a bull market. Except, the "dip" with a short is a pullback to resistance.

Now, why are these scary? Because in a bear market, snapback rallies are fast, furious, and seemingly, never-ending. You're essentially shorting into the hopes and wishes of millions of shareholders.

So, in order to protect yourself, you have to look for two things. One, volume must be dropping off on the rally back up. Two, you must use some kind of stop in case you're wrong, the trend has changed, and the stock is moving back into bull country.

http://www.thestreet.com/comment/charted/923580.html

Those are the types of shorts I look for, and that you should be familiar with. This doesn't mean, by the way, you ever have to play the short side. But, if you happen to be long a stock that sets up into one of these patterns, know that the odds of your stock going down further have just increased dramatically.

http://www.thestreet.com/comment/charted/923580.html