Stock Trading: Short Setups For Wednesday

Although we may have room to rally, I am finding far more attractive setups on the short side. Buying has lacked volume, and yesterday saw a large number of reversals in sector ETF’s and individual stocks. Here are a few that I am watching for today:

- Magellan Midstream Partners (MMP) is in the oil transportation and storage business. It has seen a huge rally off the lows, and is now at resistance. I am short already.

- Plains All American Pipeline (PAA) is in the same business, with a similar pattern. I’m short this one as well.

- Ultrashort Oil & Gas Proshares (DUG), the ultrashort oil and gas ETF, looks bullish here.

- Utilities Select Sector SPDR ETF (XLU) rallied at the open yesterday, then sold off on high volume to end in the red. This is a common theme from yesterday.

- Ingersoll-Rand (IR) is a similar pattern.

- iShares FTSE/Xinhua China 25 Index (FXI) was not able to get through a declining trendline.

- AMR (AMR) is at resistance.

- Materials Select Sector SPDR ETF (XLB) is having trouble getting through 29.60.

- Constellation Energy Group (CEG) did not participate in Monday’s rally. I am considering a short position with a tight stop over yesterday’s high. I would be adding short on a close below 23.00.

- Unibanco (UBB) has resistance around 84.50.

- ITU (ITU) is another Brazilian bank with a similar pattern.

- First Solar (FSLR) could not get through the declining trendline.

- Blue Coat Systems (BCSI) is at resistance.

- Brasil Telecom (BTM) as well. I am looking for the Brazilian market to pull back some more here.

- SunTrust Banks (STI) is at the level of an old trendline, the significance of which depends on how you interpret the action in September. Price is also sitting under a declining 200 day moving average.

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