Hello, everyone! Barrie Einarson from Trade Ideas with another edition of What Makes This Trade Great! To Subscribe to Trade Ideas: https://go.trade-ideas.com/SHQ
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Today, we are looking at $PGY, and this time the opportunity was on the short side.

I have a Top List in Trade Ideas called Large Cap Losers, and over the last two or three weeks, I have noticed several stocks displaying a similar pattern. Many of them had been in strong upward trends for quite a while, but those trends were beginning to weaken.

$PGY had already pulled back before attempting a small bounce. In the trading room yesterday, I mentioned that I wanted to study some of these former high-flyers and find a good short setup.

There were probably three or four potential candidates, but I selected $PGY because of what I saw when I looked to the left on the chart. The stock had plenty of room to fall before reaching its next previous low, giving the trade an attractive downside opportunity.

I did not rush into the trade at the opening. Instead, I waited for the first 15 minutes to see whether the stock would establish a clear downward pattern.

It did.

Once that bearish trend was confirmed, I entered the short at approximately $19.35. From there, $PGY continued falling and eventually reached approximately $18.22 before bouncing.

That represented a move of more than $1 per share.

The lesson from this trade is to watch stocks that have experienced extended upward trends but are now beginning to break down. Trade Ideas Top Lists can help identify these changing conditions, but patience and chart analysis are still essential.

By waiting 15 minutes, confirming the bearish pattern and checking the chart for the next support level, I was able to find a short with plenty of room to work.

That is what made the $PGY trade great!

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This content is for educational purposes only and is not financial advice.