Home » Watchlist Update: Markets Fail at Key Resistance Level

Watchlist Update: Markets Fail at Key Resistance Level

The October rally came to an abrupt end last week.

The Nasdaq 100 fell over 7%, and the S&P 500 was down about 4.5%.

Daily Chart of S&P 500 Index with Moving Averages – Source: TradingView

Both indexes are failing at their respective 50-day moving averages (MAs). 

Even if they were able to push through to the upside, it would be only the first hurdle in returning to a bull market.

As long as the market continues to trade below a declining 50-day MA, it is hard to be overly bullish. 

With that in mind, here are three other ideas for short trades I’m watching this week…

Array Technologies, Inc. (Short Idea)

Array Technologies, Inc. (ARRY) has fallen out of favor and is trading against a significant support/resistance level.

Daily Chart of Array Technologies, Inc. (ARRY) – Source: TradingView

I would consider a short trade on ARRY near the $18 level and risk 5%-10% on the trade.

Autohome Inc. (Short Idea)

Different stock. Same strategy…

Autohome Inc. (ATHM) held above its $33 support level all summer.

But after multiple tests, the stock finally broke down and traded lower.

Daily Chart of Autohome Inc. (ATHM) – Source: TradingView

Shares popped Friday morning after the company reported earnings, sending the stock right up against a resistance level as well as the declining 50- and 200-day moving averages.

This is a great place to try a short trade with a tight stop around the $34 area.

DISCLOSURE: I took a short position in ATHM on Friday morning.

NextEra Energy Partners, LP (Short Idea)

Noticing a theme to the setups this week?

NextEra Energy Partners, LP (NEP) is also trading against a key resistance level.

Daily Chart of NextEra Energy Partners, LP (NEP) – Source: TradingView

The stock failed here for two months this summer and again in October.

I think it’s worth a stab on the short side to bet on another leg lower.

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