Should you sell short?

If you think the market is going to decline substantially or a certain stock is ready to cave in.

You could sell the stock short even though you don't own it by borrowing the stock from your broker.

If the stock falls in price as you expected,you can buy it at a lower price and pocket the difference in price as your profit.

Never short an advancing stock just because its price seems too high to you.

Save the short selling for bear markets.

Two rules may help:

**   Don't sell anything short during a bull market

**   Never sell short a thin capitalised stock

The two best chart price patterns for selling short are:

**   The head and shoulder top

**   Third and fourth stage cup with handle or other

      similar patterns that have definitely failed after an

      attempted breakout.