Put PCLN on the Radar

Around and just before October 3rd I had posted numerous times there were hundreds of pre-qualified shorts that looked good strategically, but they were falling just short of the head fake move that Wall Street usually needs and that makes such a great entry when done right, in other words the tactical side was missing, which as you've heard probably for the 12th time now, led to an expectation of a strong market rally; not for the market averages, but specifically to move these hoards of positions above levels that were so close any way, I had even said "I just can't believe that Wall St. would walk away from all the goodies just right above".

Of a watchlist of literally hundreds, PCLN was one of those and for whatever reason, the high price, hatred for William Shatner (not from me, I love Star Trek), whatever the reason, there's a lot of interest in shorting PCLN. I'd be VERY careful as it does not have any kind of developed top, but it could be put in to a channel busting column, a bit different than usual.

In any case, here is why I'd have PCLN on the radar, I can't even say that I wouldn't enter a partial short here with room to add on, but as always when we phase in to a trade, adding on at better levels HAS to be part of your risk management BEFORE you enter the trade, Dollar Cost Averaging is rarely a good idea and a terrible habit. The only reason I say I'd consider a partial position is because PCLN made the break out move to the area I was expecting and it's above the ultimate psychological level of $1000 which was a must in this case. For a new position, I personally would not go much more than 1/3rd of the intended full position and likely closer to 25%, I'd want to try to enter that as close to the recent highs as possible.

 This is the breakout area I was hoping to see. Honestly I think PCLN needs a clear Channel Buster or a more lateral move (a topping pattern), but this is more because of the process than being able to say, "Look, there's an XYZ top!". The trend here has been strong, I think the final sell/short signal needs to be just as clear.

This is a 15 min chart, this doesn't show the long term 3C trend, but it shows some great stuff like a gap that was sold in to, price trend confirmation (green arrow) and the negative divegrence on the breakout above the previous high so it looks clear this is a bull trap, it's just not clear that it's done.

 This stronger 30 min chart shows the same thing, distribution signals on the first top to a smaller degree and stronger on the break above that area recently.

Even the 60 min chart is now showing the same which would tend to confirm that there's some pretty heavy action going on there, but for me to enter a full position all at once here, that 60 min chart would need to be leading negative close to a new low on this chart. The intermediate and short term charts would need to line up as well.

I would keep an eye on PCLN and maybe set price alerts at the top of the recent highs and as I said, I may phase in to a position in small pieces if that's feasible for you'r portfolio size, but I would not enter the bulk of the position until those other signals are in place.

In any case, PCLN is in the right area.

GOOG is another to put on the radar.