Even though the market is oversold, Ryan Mallory of SharePlanner.com, suggests that means a bounce is due and offers a list of bearish trade setups so that when that pop does occur, traders can use it for new setups to the downside.
The title speaks for itself. The market is oversold and a bounce is due here. I'm waiting for that bounce before I start adding new short positions again. When that bounce does occur it will be vicious and squeeze a lot of shorts out of their holdings.
The key is to use that bounce for new setups to the downside. A lot of the shorts in the list below shouldn't be shorted at the present time, however, if we get a strong bounce out of this market, it will put stocks right at some key resistance levels in individual stocks that will provide an excellent reward to risk ratio (that currently isn't available in the current conditions) in this market.
So wait for the pop. Once we get it, you'll see the market start to weaken again and that will be your cue to jump back in on the short side of this market.
Here's the list of bearish trade setups:
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By Ryan Mallory, Founder, SharePlanner.com
