PCLN Trade Opportunity

I already have a PCLN short position in the equity model portfolio, it's doing well, up over 12%, but this is in my view, just the start. I would say the PCLN hort trade hasn't even begun yet. This is a perfect example of the type of trade set up in which you let the trade come to you. I have a little room in the PCLN position to add to it and just need some price strength to do that, we may get it. For those who haven't seen the idea before or those who have and just need a refresher as to why, this post should cover it all for you. Even if you aren't interested in PCLN short, this is a good example of letting the trade come to you rather than chasing it, which gives you better positioning, beter timing, better probabilities and less risk.

 On a 5 day chart I have just colored the zones in which PCLN went from rising prices and volume to an uncharacteristic rise, to an area in which it looks like it nearly broke (the market saved it) to a very parabolic move on diminishing volume which is really the ugliest part of the chart and the most dangerous for PCLN longs.

 Here's the daily chart, after that parabolic run up, which is starting to fail, PCLN posted a small double top, wasn't able to make a higher high and downside volume picked up, this looks very much like a top and although I would normally expect a much larger top, at least the parabolic portion of the tun should be easily retraced and then some.

 The daily 3C chart is clearly negative at the second top, daily chart divergences are strong divergences.

 Money Stream looks very similar to 3C, although it's a totally different kind of money-flow indicator, it confirmed PCLN's rally and went leading negative also at the second top.

 Just to verify, the 60 min chart went negative in to the first top and leading negative in to the second-thus far everything looks perfect for PCLN as a short trade.

 Now all we need is some strength to short in to. I shorted in to strength at the previous highs, thus the position is in the green, but left a little room in case we saw a better short entry, at this time I'm willing to fill out the rest of the trade (about 25% more to a full position size) on any decent strength. The 1 min chart's overall trend shows a positive leading divergence in the near term, as if PCLN, which just broke below support, is getting ready to run a volatility shakeout of the shorts.

 Looking for timing, the 2 min chart has been leading positive for several days

 The 3 min chart is hitting new leading positive highs.

And the 5 min chart is showing that strength migrate to it. I'm only showing the near term view of these shorter timeframes, but if I were to zoom out, they have longer lasting positive trend, but for now, I'm looking more to pinpoint a reversal to the upside.

Here the 15 min chart looks really good, as if PCLN is just about ready to go.

It's difficult to say what the target area would be, but anything near the 2 previous tops would be good enough for me, if we got even more upside, all the better-I'll rely on 3C to give me an idea as to when the time is right to add more shares. The long term charts show real trouble here.

I wouldn't get caught up in the price, a percentage move is the same on $10k invested whether you own 30 shares or 1000.