Shorting KLAC

[Goods]

100 sh for now shorted @ $55.27.

Descending triangle pattern pushing at it's early Aug support of just above $55. It's also closed below it's 12 month uptrend line the past couple of days.

Stop loss @ $58 for now but this will change when I get a better look at it.

[Goods]

Covered for a loss at $57.62. Went grocery shopping and came home to a upward breakout.

[The Little Giants]

A couple of notes if you are interested in some possible help. I know you said you are learning and looking for advise.

I don't mind your thought of trading what looks like a descending triangle. But, I'll tell you what I didn't like about this one.

The stock made a two month low on Friday but then quickly bounced a full dollar to intraday highs and it appears that you then shorted it (based on your entry price) in the middle of that run from lows to highs. When that happens on a descending triangle, you really want to wait for it to retest intraday lows so that you get confirmation that the level that you are shorting at is significant. If it is, it usually won't bounce to intraday highs.

You also mentioned that it closed below its 12 month uptrend line in the past couple of days. Well, keep in mind that we draw the uptrend lines ourselves, so they aren't always significant. However, if it is significant you would want to enter the stock as it retest that line to the upside because it should then act as resistance, that type of entry would make sense and would give you a quick and easy out because it should have problems advancing thru that spot.

Also, I'm not a big fan on desecending triangle shorts that are formed right above the 200 day ma (unless it's a daytrade (intraday formation). The 200 day MA is significant, especially on this stock, so you would have a lot of obstacles to get thru to get a major drop from you entry point. Adding to that, I could easily make a claim that the real descending triangle pattern starts on Aug 3 and will probably materalize right at the 200 day sma. This may not be the case, but the point is that these patterns are subjective and are much easier to look at after the case (like in the books we study). Therefore, you should try to avoid the patterns when these other obstacles present themselves.

I typically like to short stocks as they are (imo) running into resistance. Therefore, if you would have summized this pattern on Sept the 18th or Sept the 19th as it tested its 50 day MA, I would have been OK with the trade. The beautiful thing about doing it that way is that often times the descending triangle will not work out, but your trade still can be a winner (Look at the chart again and you see what I am referring to).

I hope this helped.

[Goods]

Always appreciated and never taken negatively. I've had my eye on it for a week or so and actually shorted it Thursday. So when it made new lows Friday, it still looked good.
I will print out and study into what you wrote tonight.

Thanks LG

[The Little Giants]

OK, I like the Thursday entry a little better but in that case you have to keep a tighter stop. You got in on the anticipation that it would make those new lows so once it happened and then reversed to intraday highs and more importantly when it became clear that it was going to close toward the upper end of that Friday's tranding range, well, then that is the time to exit the trade. KLAC may still present an opportunity for a short, but it just got a little too oversold here.