Continue reading...Most investors by nature will “go long” when they buy stocks. Few investors naturally will short stocks (or bet on their decline) because they really don’t know what to look for. Some investors see the shorting process as somewhat counter-intuitive to the traditional investing process, since many stocks do appreciate over time. That said, there is a lot of money to be made by shorting and, in this article, we’ll give you a list of signs that show when a stock might be ripe for a fall.
Technical Trends Look at a chart of the stock you are thinking about shorting. What is the general trend? Is the stock under accumulation or distribution?
It is not uncommon to see a stock that has been in a downtrend continue to trade in that same pattern for an extended time period. Many traders will use various technical indicators to confirm the move lower, but drawing a simple trendline may be all that is needed to give a trader a better idea of where the investment is headed.
As you can...
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