My Shorting Portfolio

We all know that stock prices don’t always move in one direction. They move in cycles. The whole point of shorting is to take advantage of the downside moves ( after developing conviction based on multiple facts)

I go short in the following cases :grinning:

My first and foremost condition for shorting is that overall market trend should be down (opposite is true if I want to go long)

a) After Climax Moves in certain stocks - current eaxample -Deepak, Fine Organic ( you can learn about climax moves by clicking on following link )

b) When I find valuation overstretched + rest of the stocks in the sector start correcting + overall market sentiments are weak ( for example , am planning to go short in CDSL in coming days as all platform -companies stocks have already corrected a lot but CDSL is yet to fall to a reasonable degree).Keep in mind that all stocks in a sector move in a herd. Some are early movers and some are laggards.

On technical-studies basis :

c) Head & Shoulder pattern or rectangle pattern breakdown (current example Dixon,Naukri ,IPCA)

d) A zig-zag correction (ABC) , based on EW - I wait for 5 waves correction in wave A, completion of wave B and then I try to short when I get confirmations that wave C is about to start. (refer to the follwoing pic) Current example : Naukri, CDSL

wave15

There are many other methods also.

Yes it is not so easy. But you would agree that making serious money in any proffession is not easy, one needs to study , practice ,improvise , manage risk and to be patient.

Hope this is helpful.

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