When I was beginning to trade 12 years ago, for some reason I could never sell short. I was afraid, it felt weird, and it just didn't feel right. Funny thing is, the same words I heard Jim Cramer utter on Mad Money show, so I knew I was not alone. After a few years, I was talking to a professional trader and he told me that he rather short sell than go long any day of the week, because of one reason: panic spreads faster than optimism! That phrase was stuck in my head since then.
Now when I do my nightly scans, I seek for short opportunities first, then long. First in line was PACCAR, Inc. (NASDAQ: PCAR) that tumbled almost 6% at the open with a $3.1 million volume. Yesterday it fell slightly below its 50-day moving average and that was the clue for short sellers to dump this puppy. 6% gain is not bad in 10 minutes considering that an average high yield bond pays that in a year.
Another stock that caught my eye yesterday was Mcgraw-Hill Companies Inc. (NYSE:MHP). Chances are your son or daughter has a textbook from this publishing company. Well unfortunately today this stock is not a "textbook material" today (my stab at investing humor), as it dropped 4.23% with an increased volume of 1.8 million, which is twice the normal average that the stock trades with.
Company saw a 4th quarter loss as their profits fell 8%, depressing the current year's earnings outlook. Company saw a particular decline in a higher education segment, and with the recent article that more and more parents see colleges as a rip-off, an investment thats is not even worth the 50-70K that is spent. That can be clearly seen in the gloom and doom that is present in Mcgraw's future prospects.
My last bear pick is Monster Worldwide Inc (NYSE: MWW) that slid 3.9% at the open with a 3.5 million shares increased volume. In my opinion, the lack of employment is not the problem with this company, but the competition has gotten fierce. There are so many new job sites from yahoo Hot Jobs to Jobing.com, Emurse.com, etc. On top of all, Monster's new platform and user interface is horrible, at least I'm not fond of it. They were successful though in implementing the new iPad application for job hunting, which allows people to search for prospective employers by a mobile phone.
I think this stock is way oversold, it penetrated the 50 ($22.86) and 200-day ($16.24) averages to stabilize at $15.85 with a beaten down RSI of $20.23. If traded carefully, you might be able to catch a percent or two when the smoke clears. Again, due your own due diligence and keep this stock on your watch list. Good luck!