These were two of the first non-market directional "stock pick" trades we looked at, which I had said, financials would be first; JEF and KCG, both in the WOWS model portfolio as short trades.
The recent bounce we had been looking for a few weeks ago to initiate and/or add to some short positions seems to have worked out very well for both of these trades as pointed out yesterday.
Here's the updated charts with some potential stops.
JEF's bounce on light volume made it an ideal area to look at initiating or adding to a short trade on the troubled financial stock.
As pointed out yesterday, the 15 min chart which tends to be decisive on reversals in this timeframe has been leading negative, an ideal time to add or start a new position.
Yesterday's late day pop was negative just as almost every other hart I've seen.
The longer term hourly hart is also leading negative, which is not a good sign for the intermediate term trend in JEF.
The 3 day trend channel has held the entire downtrend, it was close, but it did not break the downtrend (always use the channel on a closing basis and use the lowest point of the channel as the stop.)
KCG is still in a complex top, but coming off what appears to be the final right shoulder.
Here's the bounce where we wanted to consider adding or initiating a short on KCG.
Again the 15 min 3C chart which is a strong indication of a reversal with a trend this length has been leading negative.
Yesterday's pop was also negative.
And the 30 min chart remains leading negative, not a good sign moving forward for this financial.
The 3 day trend channel has a stop right now around $13, but it will move down with price fairly quickly and once out of the top, should be able to be tightened.
Here's today's drop thus far, over 3%.
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