Kardec Trader walks through a shorting strategy using chart patterns and moving averages. He shorted AVGO at $188 and MU at $98 using low tight bear flags, 200 SMA rejection, and volume gap-downs as entry signals.
$188
$98
the 200-day simple moving average (200 SMA)
initially the descending 5-day moving average, then the 10-day moving average as it rolled over
Avgo was a short that I actually took. You get a move effectively going nowhere, breaks down, does this very clean bear flag. And instead of a high type flag, right, it's a low tight flag. So it's a bear flag instead of a bull flag. And I remember I shorted this thing 188 bucks. MU was another one. It just kept rejecting, kept rejecting the 200 simple moving average. And then on earnings you get a gap down on a pickup in volume. I actually shorted this thing at 98 bucks. And then just using the descending five day moving average initially, and then as soon as it started to rol over, use your 10 day moving average.
