What to look for in a short setup

Stocks move in momentum bursts of 3 to 5 days and magnitude of he move during that period is 8 to 20% .

Momentum burst also works on bearish side. The only thing to remember is that during bull markets there are relatively few short setups and the magnitude of follow through on them can be lower. In bearish market momentum burst shows same tendencies like bullish burst setup.

Bearish setups can happen near recent high and can work very well when market turns from bullish to bearish phase.

What to look for in a setup

KOF: A recent bearish scan candidate

A established downtrend of 10 days plus.

Small counter trend bounce of 5 to 10 days

Series of narrow range days pre breakdown

Series of positive days pre breakout

Breakdown with range expansion.

Close near low.

Volume surge on b/d day preferred but not necessary for bearish setups.

Obviously to find these candidates efficiently you need to scan for them daily. A simple range expansion candidate can help you find them.

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