As markets could be setting an intermediate top, investors are on the lookout of a tactical play to short sell stocks, for a short period of time. The stocks with a weaker stock chart are potential short selling candidates.
We already wrote that, by far, the weakest stock market sector was retail, and we concluded that the retail to S&P 500 ratio revealed that the retail stock market sector will be an enticing short once markets weaken.
This article features 3 stocks which investors are already selling, so they could be setting up for juicy short selling candidates.
One of the weakest charts we observe is the one from Petroleo Brasileiro (Petrobras). Is is an oil company, and investors are selling this stock since a couple of weeks. It makes for an interesting short selling candidate. It is one of the most enticing short selling opportunities potentially, certainly if energy stocks would collapse (look at the trigger we explained in this article).
Furthermore, a totally different chart setup is seen on GILD’s chart. Short selling in this stock did not accelerate lately, it basically stabilized after the stock lost 40 percent of its value in the last 24 months. However, once the area indicated in red on the chart gives away (and that is a big IF of course), we will see short sellers stepping in. At that point, GILD would be an enticing short selling opportunity.
Lastly, not necessarily a very long term selling opportunity, but certainly a short term tactical play, Delta Air Lines could drop at least 10 percent, probably around 20 percent, if stocks become weak. That is because the stock was not able to break out, after we spotted a breakout attempt lately.