The Bears Are Back! 6 Under $5 Short Watch List For Tuesday October 18, 2011

A stock can be good or bad and still be an excellent short. These stocks are
overbought so Ill be watching for declining volume, big offers, bearish intraday
patterns or bad news to take a position. Stocks can remain overbought for quite
some time, so just because theyre overextended doesnt make them sure wins. If
shorting isnt something you know how to do, but want to learn, sign up from my
premium service and Ill teach you. To short stocks under $5, I recommend you
setup an account at Interactive Brokers. Rentech Inc. ( AMEX:RTK ) is coming up
on some pretty solid resistance in the $1.35 range. The RSI is now overbought
and historically, a 2 year chart shows its inability to hold these levels. Ill
be watching close for declining volume or big offers. Based on the chart my
guess is were a little early to the dance still on RTK, but a $1.40 to $1.10
short seems like a reasonable idea at this point. Raystream Inc. ( OTCBB:RAYS )
is a pumper thats destined to come down at some point. Shorting just before the
wash isnt easy to do on these pumps, but there are tell tale signs you can look
for like declining volume, big offers or the first down day. Finding shares isnt
always easy but there is no better feeling than being short when one of these
types of plays collapses. See the Allezoe Medical Holdings (OTCBB:ALZM) chart if
you want to know what Im watching for. Ideal range on this trade is to catch the
wash. Ocean Power Technologies Inc. ( NASDAQ:OPTT ) showed some signs of
weakness Monday. This is one I shorted early on in its move with little success,
but Im watching again because its now starting to get top heavy. Ideally the
range would be short at $5 and cover at support of $4. Pizza Inn Holdings Inc. (
NASDAQ:PZZI ) is in the middle of a bullish breakout. Id expect a chart like
this to run some more before pulling back, however, the last time it was
overbought it retraced over $1 and thats exactly the type of range Im looking
for. Let this one continue to run for now, but once it starts to pullback it
should make for a good day trade. Andatee China Marine Fuel Services Corp. (
NASDAQ: AMCF ) is an overbought China play, do I really need to go any further?
The chart is one of the better setups as its already showing signs of cracking.
What I like about this is entry here give a clear and close stop loss at the
recent high with a good chance of falling further. With support at $2.85 and
$2.25, theres plenty of range if it dips. TranS1 Inc. ( NASDAQ: TSON ) was
halted in after hours trading Monday and is the only stock on this short list
that isnt overbought. Its going to tank tomorrow morning, already down a lot in
the after hours, but you can bet a lot of traders have not seen the news yet
meaning panic selling when they do. This one well have to play by ear in chat
but Ill be looking for shares and a range in the pre-market Tuesday, however,
theres a good chance we already missed the boat here.