1. Bear Rally Short
Classic Swing Trade

2. 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.

3. 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

4. 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.

5. 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

6. 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%.

7. 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)

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

9. Chart