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The Portfolio Armor Substack
Trade Alert: Betting Against An Overbought Stock

Trade Alert: Betting Against An Overbought Stock

Heads we win 4x, tails we lose x.

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Portfolio Armor
Sep 30, 2024
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The Portfolio Armor Substack
The Portfolio Armor Substack
Trade Alert: Betting Against An Overbought Stock
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ChatGPT4o/DALL-E still misspells words in images. We’ll have to wait a little longer for the singularity.

An Overbought Stock

Using Chartmill, I screened for names that met these criteria:

  • Has options

  • Valuation rating <=2 (on a scale of 0-to-10)

  • Piotroski F-Score <=2 (on a scale of 0-to-9)

  • Relative Strength Index >80 (on a scale of 0-to-100; figures over 70 are generally considered overbought).

That screen yielded exactly one stock, with these metrics:

  • Valuation rating: 1

  • Piotroski F-Score: 1

  • Relative Strength Index: 84 (as of Friday’s close).

I am agnostic on the longer term prospects of this company, but I am betting that after spiking more than 37% in the last 30 days, this stock will drop by about 17% within the next few weeks. If I’m right, we’ll make about 400%, and if I’m wrong, we could lose as much as 100%.

Details below.

Today’s Bearish Trade

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