As traders we need to be nimble and be unemotional and realize when we are wrong. Being able to adapt is a crucial ingredient to becoming a successful trader. Lets take a look at where we were WRONG recently. THRM supplies parts to the auto sector which has been strong with moves in GM F TTM TM HMC to name a few. Below is how we examined the stock precisely in our Thursday 2/19 Game Plan.
Stocks to be viewed as shorting opportunities are THRM. THRM is an auto periphery play that is higher by 14% YTD and 58% over the last one year period. The stock is at a critical juncture here as it rests both on the upper line of a bearish wedge pattern and 200 day SMA resistance forming a cluster of evidence which adds significance to that area. To its credit it has risen nice 3 of the last 4 times reporting earnings higher by 5.4, 8.7 and 10% on 8/1, 5/1 and 3/5 (it dropped 13.4% on 10/30). The stock reports earnings next TUESDAY morning. It is higher 6 of the 9 weeks since a huge 17.8% weekly move the week ending 12/19. None of the up weeks came in strong volume. Lets look to short at 42.