False Breakout of Prudential Presents a Short Selling Opportunity

Prudential (PRU) rose to 79.50 which is near resistance at 80.50 as Associated Press reported that the insurance sector advanced after Hurricane Gustav passed through the Gulf of Mexico without inflicting massive damage -- and the sky-high insurance claims that would have resulted.

Prudential's rise is actually a pop in a bear market that is to be sold, if one follows my investment maxim: in a bull market be a bull; in a bear market be a bear. In a bull market, one buys on dips; in a bear market, one sells into strength.

When I look at the MSN Finance ongoing chart of PRU, VTI and QQQQ, it looks to me like the bear market picked up steam on August 15, 2008.

So the investment application is a sell of Prudential.

The Yahoo Finance 5 day ongoing chart of PRU IYF KIE and IAK shows Prudential's pop.

The MSN Finance ongoing chart of PRU, IYF, KIE, and IAK shows Prudential's pop.

Yes definitely sell, like immediately, when trading is low.

Comments

[John C. Lee:]

Do you have a disclosure? Next resistance is at $82-83. I expect some serious churning between that and $76.20 200-day MA.

2008 Sep 04 05:06 AM