Take a look at the chart for $NEAR : the bears have made a killing, but whatever you do, don't blindly chase the short here.
The numbers: 904 bears are crushing 244 bulls. The bears' average entry is 4.15, and they've already raked in a whopping 10 million U! The bulls' average entry is 3.97, and they're all trapped. With shorts this crowded and profits this substantial, any sudden wave of profit-taking could trigger a bounce.
Technicals: The daily and 4-hour charts are both firmly bearish. But note that the RSI has dropped to around 30—deeply oversold. The 4-hour chart found some support at 3.62, but the rebound was very weak.
Outlook and trading plan: The overall trend is down, but price is already very low. Shorting at the current price could easily get you shaken out by a nasty wick from the market makers.
Strategy: Short the bounce!
Wait for a rebound to around 3.95–4.05 (resistance at the 4-hour moving average and the bulls' trapped-entry zone) before shorting, with your stop at 4.15. First target: a break below the previous low at 3.62, with a possible move down to the major daily support at 3.3. $NEAR
The numbers: 904 bears are crushing 244 bulls. The bears' average entry is 4.15, and they've already raked in a whopping 10 million U! The bulls' average entry is 3.97, and they're all trapped. With shorts this crowded and profits this substantial, any sudden wave of profit-taking could trigger a bounce.
Technicals: The daily and 4-hour charts are both firmly bearish. But note that the RSI has dropped to around 30—deeply oversold. The 4-hour chart found some support at 3.62, but the rebound was very weak.
Outlook and trading plan: The overall trend is down, but price is already very low. Shorting at the current price could easily get you shaken out by a nasty wick from the market makers.
Strategy: Short the bounce!
Wait for a rebound to around 3.95–4.05 (resistance at the 4-hour moving average and the bulls' trapped-entry zone) before shorting, with your stop at 4.15. First target: a break below the previous low at 3.62, with a possible move down to the major daily support at 3.3. $NEAR
