Learning to short - setup for symbol GW?

[Justin]

I'm learning to short sell. I've found what I believe to be a setup for a stock (Symbol - GW). And would like to get some feedback on what I'm seeing. I've attached 3 charts to this posting (Monthly, Weekly, & Daily charts)

On a Monthly chart, the stock has put in a high and has retraced. It hasn't quite hit a Fib level yet. I also marked the chart with a trend line and 3 support levels. The bolded red support lines I put in looking at the monthly chart and the dotted support line I put in on the weekly chart. TRSI is falling.

On the Weekly chart I see lower swing highs and lower swing lows. TRSI at the bottom of the chart shows a stronger pullback as compared to the TRSI on the Monthly chart. You can see the dotted line – I see the support level from April 2008 – that’s what I used to mark it.

On the Daily chart The lower swing highs and lower swing lows are pretty visible. I see Friday there was a strong move up but sellers ended up taking over. TRSI is below the 2 green lines but the Gray line is over the Blue line and this leads me to my questions for you.

The trend is still down and TRSI in the higher timeframes shows some weakness. I believe this is a shorting opportunity with a potential pullback to the weekly (dotted red line) level but more likely it will probably fall to the 1st bold red line support which as you can see on the Monthly chart at the top of the page there is a 61.8 retracement to around $6.68. Am I on track - this is a candidate for short? Any feedback from anyone to help me learn and or see something I'm missing?

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[lori]

hi justin-how r u?!
i couldnt view ur charts yet, but i looked at my own, drew some fib levels, and i see support at around 7.45 and 6.60ish. those r sk supports. it supported at 6.88 last time. it closed around $8 on friday.
i think i would want it to bust thru those supports before i shorted it, becuz it could stall in those areas... i guess it depends on the type of move ur looking for too, and the amt of shares ur shorting..
at any rate, i'd wait for the trsi to turn down on the daily chart.
just my input. maybe neal will tell us how a master would handle it? :)
keep us posted on how u do w it! thanx.--lori
hey justin, what time frame will u be trading from?

[Justin]

Hi Lori,
I'm doing well how about you?

Thank you for the reply! I currently have to trade from a daily timeframe - have a more than full time job so I can't Intraday. I have the 6.88 support marked on the charts I uploaded - not sure why you can't see the charts there are 3 files I uploaded...

Looks like there is some resistance (daily chart) around the 8.25 range, both 9/12 and 9/19 it hit that level.

I'm not trading this stock, just looking for setups and wanted confirmation this stock has the makings of pulling back...I'm thinking to around 6.69ish which is the 618 level on a retracement from the entire move up on a weekly chart.

Thank you!
Justin

[FibMaster]

Yes Justin it looks good for a short, if the $8 area resistance turns the market. A cross down of the TRSI on daily would be an appropriate signal.

Both you and Lori are on track.

I'll add the following complication...

The rally from Sept 16th is quite steep, so if there is a short, and it supports near $7 I may consider banking some profits. If you add a couple of expansions to the chart you will see some support at about $7.17 which coincides with some retracements too. The expansions are Jul15, Aug19, Aug28, as well as Aug28, Sep16, Sep19. Assuming Sep19 is the high (might not be).

FYI, watch out with shorts, the govt might want to protect you from your decisions? You know how wall street speculators cause so much harm to the economy.. Lucky the govt can look after us - phew!

Good trading..

[seeploxy73]

Hey all, as a newcomer, Ive found plenty of resources on the subject.. But am unsure which have good advice. Any input would be much appreciated.

Thanks