PCLN

PCLN has been a tough trade to catch, it's been in an uptrend for 2.5 years and has been a momentum crowd favorite. This also means that it has a lot to lose. Taders have made a lot of money on PCLN and they tend to fall in love with stocks that made them a lot of money. They also tend to margin up the trade, especially when there hasn't been any signifiacant risk percieved, which makes it an ideal margin squeeze play.

You may have heard me say this before, but the difference between professional traders and amateurs is pros will take multiple shots at a position, keeping their losses small until they get the position they want. Amateurs take one shot at it, usually fail to keep their losses small and walk away from the trade forever.

 I first noticed a potential problem late yesterday in PCLN, it as chopping around and the late day trade was bearish.

 Yesterday and Friday both saw very high volume with small bodied candles, this can be an indication of bearish churning, the close yesterday was also well off the highs. For Japanese Candlestick users, this is also (as of now) a confirmed reversal pattern.

 Here's a 60 min 3C view of PCLN, there's been a negative divergence, but it picked up steam recently and has now entered a leading negative position.

As for taking a shot at the trade, it's in a fairly low risk place to take a shot at a short here. The stop is just above yesterday's highs and the short can be taken at any point, so long as we have a close below the white trendline. If the trade fails, there isn't much risk there so it's a pretty decent looking set up right now.