Finding Short Setups using chartmill

Many articles on chartmill focus on selecting long setups, but chartmill can also be used for find short setups of course. We’ll try to give some ideas in this article.

Using the Shared Screens.

Our shared screens page also contain short screens. To view only the short screens, select ‘ short only’ in the first filter box.

shortOnly

 

Applying this filter will only show you the screens intended to find short setups. This is a direct link to the page. We’ll discuss some of the screens that were shared by chartmill briefly here:

Stocks nearing Support line

This screen looks for a strong support line (horizontal or trend line) that the stock is nearing from above. The idea is that the stock can be shorted when the support line is broken. This is a direct link to screen. 2 examples are shown below.

AXS_chart TMH_chart

Bear Flags

Bear flags are formed when the stock enters a consolidation zone after a strong decline. The idea is that the decline can continue when the consolidation zone is broken. Here is  a direct link to screen. 2 examples are shown below:

AERI_chart (2) RMTI_chart (1)

Short squeeze play setups

This screen finds stocks that are consolidating after a strong decline. So this is similar to the bear flags screen, only the squeeze play pattern typically takes a bit longer to form than a bear flag pattern. The idea is again that the decline can continue once the consolidation is broken. This is a direct link to the screen. 2 examples are shown below:

KYN_chart KLIC_chart

Weekly Chartmill Channel breakdown

This screen looks for stocks that are nearing their lower channel boundaries from above on the weekly chart. The channel is typically a strong support area that has been tested several times in the past. When this support breaks, a further decline is possible. This is a direct link to the screen. 2 example setups are shown below:

ANH_chart DLR_chart

More short setups from mean reversion setups.

Another interesting source for inspiration can be found in the article on mean reversion screens we posted a while ago. You can find the article here.