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Tuesday, June 26, 2007

Will there be a tumble for AKS?

We picked up this stock as a short candidate as a contrarian pick from one of the message boards. This was spoken of as a hot stock and we decided to analyze it. And needless to say, it looks like a good short candidate. Note the following divergences marked on the chart:

  1. RSI divergence.
  2. MACD divergence, though this indicates a potential danger as well. We will monitor this and weakness will be used to add fresh shorts.
We had an initial short term short position at 37.57, which we covered at 36.20. We target it to be around 35 at the 20EMA. However at this point we hold no positions.

A good price to initiate a fresh short is at 37.5.

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