Bear Rally Short Classic Swing Trade

Profit from Falling Price Many platforms have a scan for bearish stocks. Check the sector Check the industry Check the market Scan for Stocks Or Use an ETF Check earnings date if stock.

Orderly Rally within Downtrend Setup Always: (1) Normal downtrend or possible probable start of one. (2) At least a 2 day rally of consecutive higher highs and higher lows. (3) Stalls at falling 13 EMA, 20 or 50 SMA or down trend line. Price $15.00 or more Bear rally from new swing low Volume on rally not higher than on pullback

Orderly Rally within Downtrend Setup Maybe (1) Consecutive higher daily highs on bear rally (2) Bearish reversal candle pattern in area of resistance. (3) Bears win control in a day’s action in an area of resistance.

S.E.T. Stop Choices: Entry: Target Above swing high of bear rally Above prior day’s high Entry: Below the first prior day’s low Target Trendline Next area of support Possibly prior swing low

Additional Setup Reward/Risk > 2.0 (Stock). Put Option Trade Low to mid-range volatility Check theoretical pricing One strike in the money Use delta to estimate option price at entry. Buy option contingent on stock price. Initial stop custom -30% Or .. Contingent on stock setup stop. Target – based on initial stock target or 40%.

BDK – June 2 Stop: 64.95 Entry: 63.95 Target: 61.95 Rew/Risk: 2.0 Put Option Stop: 3.70 (based on stock) Entry: 4.50 limit Target: 5.50 (based on stock)

BDK Trade Open Close Profit: 1.00/4.50=22%, ($200) Less commissions Bot 2 .BDKTM Aug 65 Put @ 4.50 – 6/2 Contingent on stock price Close Sold 2 .BDKTM @ 5.50 – 6/3 Profit: 1.00/4.50=22%, ($200) Less commissions Stock 1.00/63.95 = 1.5%

Chart