setups

Basic Sell Signals - What to Look For?

The following shows a brief overview of shorting signals in a downtrend. The setups resemble buying signals in an uptrend. There are, however, subtle differences. The below figure illustrates three key shorting signals.

Read them like this:

  1. The breakdown from support.
  2. The breakdown after the stock rebounds to resistance (supply), then drops back into its downtrend.
  3. The add-to-position point for position traders. Here, the price collapses below the previous pivot low, or support.
key short signals