By Jeff Pierce
Sept 24th Update: Looks like upside momentum has dissipated and is ready to resume downtrend. First stop gap fill. Second stop < $29.
Throughout the “Look at this Stock” series I’ve only covered long side stocks. POT is a stock I’ve kept tabs on since their last earnings report which saw their stock implode. I believe this is a good example of a stock that is seeing a major change in trend caused by a negative catalyst and will likely trade lower over the next 3-9 months, most likely longer.
So where would be a good short entry?
I think it’s getting close with $34.50 being about the most it’ll rise before rolling over and continuing this downside move. There is also an outside chance this revisits the $35-36 range. So I would recommend initiating a 1/2 position near the $34.50 level and complete the short position if it moves up to $36. If it moves straight up from these levels I feel that the lows of $29 would be the 1st target and potentially much lower.
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