Very nice short set up forming in Jacobs Engineering Group (JEC). As I wrote yesterday as I closed out the long side of this position
JEC now has major resistance at $42 - if it breaks over that level I'll get back long. But for now I'm more apt to short it once it gets there. I am selling in the mid $39s but the stock should have clear sailing to $42 if the market lifts.
I was a little impatient yesterday and should of held 24 hours more to get rid of my long stake but the up and down action in the name was getting tiring. So we're here as the stock hit $41.50 intraday; I missed the top but I am going to put the short on here in the $41.10s area. The chart below looks different the charting I use which shows both the 20 day and 50 day exponential moving averages touching at $42. So we have two layers of resistance; further if the 20 day crosses below the 50 day that is even more bullish. I can also make a bull case from the chart (the stock appears to have made a quick double bottom in the $37s) so we'll see how it works out. If we are wrong, we can be out at $42.50 and take a modest loss of 3%. If we are correct we'll shoot for $38 which the stock seems to hit a lot. We did this exact same trade a few weeks ago; I'll allocate 3.3% to this trade.
Short Jacobs Engineering Group in fund; no personal position
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