Short CHDN

25 Okt 2018

As you may already know, most of the market is in correction mode.

Trade idea: All casino stocks are in a downtrend (e.g. LVS , WYNN, CHDN, etc.). They are part of the consumer cyclical category. In particular, try shorting CHDN as it is lagging the others. Few things to take note of:

• Death cross 50d MA crossing over 200d MA from above
  
• Trend line break with a confirmed daily close down
  
• Not the best, but a pretty decent SHS formation
  
• Volume is increasing
  
• Although RSI is low, it can stay there for prolonged periods of time
  
• Overall market sentiment is negative
  
• I see that total shares available is about 13.6M, so if it dumps, it will move down fast
  
• If you can short it directly, it's best to use calls as protection due to low float; otherwise, short it via puts with an appropriate expiration date or you can sell bear call spreads
  
• $200, $160, $120, $106, $91, $86, $58, and $30 are support targets in descending order. Height of the SHS formation is about $55. Neckline is roughly $255. So $200 (255 - 55) is roughly the measured target for profits. I believe we can get there pretty easily in a short period of time. You could use 3% or 4% above the neckline (roughly $270) as a stop.