GE: Shorted at $13.35

This is the third time I'm trying to short GE within the past two weeks. I've shorted GE with a limit order at \$13.35. Notice that this is the first time I've broken my rule of using a stop for both entry and exit since using it a month ago. However, I have a very tight stop this time at \$13.50. The reasons are as follows:

  1. Intraday double top and Advance-Decline negative divergence in Figure 1.
  2. XLF is failing to break above \$12.00 all morning even as the market tries to push higher.
  3. Today's morning high of \$13.42 fits in all too well with the trendline of Figure 2.
  4. Signifiant GE Level-II ask at \$13.30 just before breaking and the obvious trading range between \$13.00 and \$13.50 these days, Figure 3.

Short entry: \$13.35

Exit stop: \$13.50

Target: \$11.50, same as before since the setup is the same.

Reward / Risk = 2.0 / 0.15 = 13.3 > 5.0

Update: I got stopped out at 15:58 at \$13.50. GE and the overall market made a dash upward in the last few minutes today.

[caption id="attachment_1483" align="aligncenter" width="500" caption="S&P 500 intraday sentiments"][S&P 500 intraday
sentiments][][/caption]

[caption id="attachment_1481" align="aligncenter" width="500" caption="General Electric"][General Electric][][/caption]

[caption id="attachment_1484" align="aligncenter" width="500" caption="General Electric"][General Electric][][/caption]

[S&P 500 intraday sentiments]: http://traderpau.files.wordpress.com/2009/05/2009-05-29-spxintra1.png [General Electric]: http://traderpau.files.wordpress.com/2009/05/2009-05-29-ge_prop.png [General Electric]: http://traderpau.files.wordpress.com/2009/05/2009-05-29-ge.png