Most investors try to profit only when stocks go up. Sophisticated investors profit both as stocks go up and when stocks go down.
Investors will find that a proper combination of very long term positions, long term positions, medium term positions, short term positions and very quick trades generates wealth under all market conditions. This is an example of a quick trade.
One of the problems many investors face that the resources to help them to profit from stocks going down are rare. One such well-respected rare resources is ZYX Short Sell Change Alert .
We have just completed a trade that profited from fall in Infosys Ltd.(INFY). Reproduced below are the posts from ZYX Short Sell Change Alert to help investors understand the anatomy of a quick profitable trade.
CONGRATULATIONS TO THOSE IN INFY TRADE
April 13, 2012
Congratulations to those who participated in the INFY trade.
Yesterday we wrote:
Short zone is $56.25 to $57.00, preferably closer to $56.70.
In the pre-market the stock is trading at $49.35. Even though there is room for the stock to go lower, it is best to not be greedY, take profits right here and exit the position. After all it is 4731.5% annualized return.
NEW IDEA ON INFY
April 12, 2012
INFY is an Indian outsourcer of IT services. There are reports that tomorrow CBS will do a major piece about visa fraud at the company. We have obviously not seen the report since it has not been broadcasted, but it is likely to be negative for the stock.
We prefer to short a stock when all of our six screens are met. In this stock only five screens are met indicating the risk is high.
Further, INFY is a major company on the Mumbai stock exchange. The Indian market is oversold. We expect Indian market to go up overnight, therefore there is further risk in taking this position.
If there is meat in the CBS report, the stock has the potential to rapidly fall to $50. There is a reasonable stop zone at $57.62 to $58.26. There is a potential reward of $6.00 and risk of less than $2.00. Short zone is $56.25 to $57.00, preferably closer to $56.70.
In view of the risk involved, we recommend keeping the position size small to about 15 – 20% of the full core position size and rigorously enforcing the stops.