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Short on USOIL WTI CrudeAfter taking a look at the daily and weekly charts for Crude Oil, I decided to take a small short position, risking 0.50% of my portfolio on it mainly because I am not familiar with crude oil, nor have I traded it before, so I want to tread lightly into uncharted waters. There isn't much of a long analysis on crude oil, this one is purely price action. It fell below crucial support levels on both the daily and weekly charts so I decided to enter on the lows. As always, shoot holes into my thesis. If you see something different in the price action, let me know! All the best, RC
TVC:USOILShort
by BrandonBeylo
2
Short Position in HOG This morning as I was running through my trend following screener, I found Harley Davidson. What I saw was not good. After reporting an extremely disappointing earnings seasons, HOG started its downfall yesterday. It's interesting because for the first time I'm shorting a company that emotionally I like. This is a good learning lesson. It is helping me remove emotions completely from my trading, and I like that. On the weekly chart, this weeks candlestick bar is trending lower than the 200 MA. I wouldn't be surprised to see some pullback from this selloff, however the earnings are indeed that badly, and on a macro perspective, I have a feeling many companies will fall the way of HOG in terms of earnings reports, but that is for a longer idea back on my website. I entered at 55.80 and put a stop at 56. Yes its super tight, but due to my emotions before the trade, I wanted to trim my stops and I only used 0.5% of my trading capital on this trade. Trying to learn when to pare back due to emotions before the trade. All the best, RC
NYSE:HOGShort
by BrandonBeylo
Short Position in NFLX After Earnings MissI'll be the first to admit that I've been bearish on NFLX for a long time. Long enough to see my short opinion be ripped to shreds as NFLX share price climbed higher and higher. For those that have followed my ideas on US Equities, you know that I am not a fan of highly leveraged balance sheets. Well, NFLX is no exception. NFLX Cash to Debt Ratio is 0.52, and their Equity to Asset is 0.20. Taking a look at Free Cash Flow per Share, NFLX came in at -$3.96, almost double the decrease since last year. Because of this, I wanted to wait to see what their earnings report looked like. After all, with companies like NFLX and TSLA, I learned the hard way that it doesn't really matter how the balance sheet looks, as long as the company is meeting expectations and delivering on promises. I mean, NFLX is trading at almost 200 times earnings. 200 times. No company is worth 200 times earnings. Looking at the weekly chart (once again, I'm trying to develop the habit at looking at weeklys to give myself a better look at the more powerful movements), NFLX appears to be overreached. Now of course they could scream even higher, pushing 250 times earnings, but I don't think so. Earnings came out and NFLX didn't quite meet expectations of Wall Street. NFLX missed on their International Subscribers, which is what I was looking for as a bearish signal. Regardless, in my Paper Trading account, I shorted NFLX at 143.21 with a stop loss at $149 and an initial profit taking point of $120. This presents a Risk Reward ratio of about 7.71:1. I risked 1% of my capital. All the best, RC
NASDAQ:NFLXShort
by BrandonBeylo
Short Opp: ZBRA Potential Double Top SetupIn my quest to better understand trend following and TA, I am embarking on publishing more ideas with strict regard to TA first, followed by fundamentals. I am doing this because I usually do the reverse. Normally I will look at a company that I believe is undervalued or overvalued, and then I will look to the charts to see when a setup could be had. This time is different. Using FINVIZ, I quickly scanned for double chart patterns and came across Zebra Technologies (ZBRA). After looking at the weekly chart, there does appear to be a double top in the weekly chart, and even more importantly, there appears to be a heavy line of support coming up, that if broken, could send the share price plummeting. I am also trying to use weekly charts more, and stick to mainly weekly and daily charts. I tried working with hourly and 30 minute charts, but they simply don't fit my personality style. Hear me out, I am by no means dogging those chart times, nor am I saying money can't be made looking at those time frames. I am simply saying the daily and weekly charts fit my personality, and they fit my trading style as a global macro trader. Moving on to the fundamentals of ZBRA we find a company that appears to be in overvalued territory. After rising more than 35% over the last year, ZBRA's balance sheets don't convince me of future growth, especially at current valuations. ZBRA is taking on loads of debt which is shown in their cash - to - debt ratio of 0.06, ranking them lower than 94% of the companies in their industries. Also, over the last two years, ZBRA has failed to make a net income profit, losing $158 in 2015 and $138 in 2016. Now I know companies like TSLA can borrow wheelbarrows full of debt and still find ways to raise share price, but they are the unicorn. ZBRA has negative ROE of -16% and negative ROA of -2.84%. I just don't see the value at these levels, and frankly, I don't see the future value creation. ZBRA is trading nearly 6 times book value. There are some positives to this stock however, and I recognize these factors. For instance, ZBRA has a projected forward PE ratio of only 13, and they are trading about 50% to their median P/S. However, at the end of the day, I don't like their debt levels to their cash, and I like the short setup that the weekly chart is presenting. Entry point for this short would be right below the support line at $84. My stop loss would be placed roughly right above the resistance line at $94. In terms of profit taking marks, I like to start taking profits right after the 15% mark. I do this for a couple reasons, both of which I want scrutinized and commented on to see if there is room for modification or improvement. First I do that to ensure that on each winning trade I am beating the average for the market. Mentally it helps me and it also prepares me for one day managing others money, to let them know that with each winning trade, you are at least beating the market. Secondly, I do it to ensure that I am getting a good risk reward ratio on first profit taking. Anyways, I'll monitor how this one plays out. All the best, RC
NASDAQ:ZBRAShort
by BrandonBeylo