Every day gives us at least one stock to watch.
And today was no exception, as shown with my call this morning at 9:08 before the markets opened to short Disney (DIS) stock…
Now the question I’m sure on your mind is “Why did Kenny make the call for shorting Disney (DIS) this morning?”
I want you to be able to do this yourself, so I’ll let you in on my secret.
There were three major things in the pre-market that were allowing me to know that DIS was a short:
- The stock was gapped up on company news
- The stock saw a double top pre-market, tested those levels and then started selling off
- The stock was trending downward
You can see this action in the image below.
The day before, the stock closed at $96 and it was over $100 pre-market.
Stocks that gap up overnight tend to sell off during the day because people want to take profits on their stock. Very rarely do we see a stock gap up, and then keep going up.
But the gap up is just one of the three things that told me where this stock was going.
As I said before, the “double-top” showed me that sellers were in control of the stock.
And they weren’t about to let it get over $101.50.
Pro tip: When you see these double tops or bottoms, draw a horizontal line on your chart to mark those critical levels of resistance and support.
When you do this, you allow yourself to see into what the algorithms and professional traders see.
Then, finally, the third and last thing that let me know that this was a short was the established downward trend.
In our case on DIS, the stock continued downward all the way back to $97, giving a fantastic opportunity for traders to go short on the stock.
Shorting is a necessary tool that you need in your arsenal to properly trade around the VWAP.
As always, if you have any questions, feel free to email me at KennyGlick@MoneyMapPress.com.
November 22 2022