When to short sell a stock? Let’s look at it with BioMarin Pharmaceutical Inc. (BMRN) weekly chart.
2. The stock witnessed a severe breakdown in heavier volume back in December 2018.
3. The stock immediately rallied and tried to show the strength.
4. But, the stock was unable to hold the 50 day moving average price (DMA) line and offered the 1st short selling opportunity in mid March.
5. Then the stock kept on presenting short selling opportunities many times as it failed to hold above the 50 DMA line.
6. The 50 DMA line was serving as a resistance all along during this decline.
So, one had to wait at least 3 month or so before shorting this stock. At least not in 1st breakdown.
What’s a 50 DMA ? How do I use it? Please consider reading this article 50/200 DMAs. What are they? Why I like them.
