It is hard to know which stocks to short when we observe only a few stock in our portfolio. It is a blunder to only think of shorting the stocks in the portfolio that you have. Most of the stable stocks are not good for shorting unless something like BP happens. BP was a good stock stort last month but I did not even short that stock. That was foolishness. I do not know why I did not short stocks last month. I cannot understand it.
Anyway, I kept looking for stocks to fall in the wrong directions. The stocks with good EPS are not that volatile and they have reached highs and are probably declining slowly. But the stock to really short are the ones that have negative EPS and those that rallied for no reason along with the good stocks like AAPL..like apple and CMG,NFLX. chipotle and netflix. When ever there is a rally the stocks at their 52 week lows or those that are at the bottom for whatever reason also rally along with the good stocks. So when the rally is over, these (i will say no news stocks with negative eps) NO NEWS stocks decline by as much as 50 percent from their highs.
No one knows these NO NEWS STOCKS. The only way to know them is by stock screening on google using
last price, 52 w high and 52w low, and eps , also high p/e helps.
using these indicators one can search for stocks that are good for shorting. since shorting is only allowed on stocks that are priced above 5 dollars, one can put a minimum of 10 at the last price and maximum 100.
Do not get stuck to your portfolio and looking in the wrong direction when there are a bunch of stocks to short. This also holds when stocks are moving up during a rally. Observe the S&p. if there is a rally, look for stock on stock screener. Look of the industry that is rallying. check if it broke the 30 MA with high volume etc.
Especially for shorting, this stock screener is very useful. Many stocks that have rallied can be targeted.
This is another lesson, I learnt today.