The Dirty Dozen: The Top Twelve stocks to short right now

Submitted by theStockMasters... on Wed, 02/18/2009 - 18:18

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Financial News

If you're not shorting stocks right now, chances are you're handing your money straight over to the bears.
If you can't beat them, join them. We've compiled a list of the top 12 stocks to short right now in 2009. Our selection criteria includes (among other things):

- Greater than 30% Short Interest
- Current Price Greater than $10.00
- 5 cans of Red Bull

With these stocks, you can be like Dirty Harry, talking to the Bulls: I know what you're thinking. "Did he fire six shots or only five?" Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?

Here are the twelve stocks, hand-picked by the Stockmasters Team

Cut & Paste the List into your own Portfolio:
PCLN,PPD,NVEC,SBNY,RATE,JOSB,NETL,WIRE,SRDX,JRCC,TWP,CONN

Symbol Company	Industry	Prior	52 Week	Market	Percent Short
PCLN priceline.co...	Computer Services	72.66	-28.92%	2.9B	58.38%
CONN CONN'S, Inc.	Retail (Technology)	14.35	-6.76%	322.0M	55.42%
PPD Pre-Paid Legal Services, Inc.	Personal Services	32.79	-36.82%	380.9M	47.91%
SBNY Signature Bank	Regional Banks	27.54	-5.03%	970.6M	45.71%
NETL NetLogic Microsystems, Inc.	Semiconductors	25.37	2.88%	553.9M	42.18%
RATE Bankrate, Inc.	Computer Services	26.61	-43.44%	500.7M	40.25%
JOSB Jos. A. Bank Clothiers, Inc.	Retail (Apparel)	26.44	11.84%	482.5M	38.31%
TWP Trex Company, Inc.	Fabricated Plastic & Rubber	14.49	100.14%	222.0M	36.63%
SRDX SurModics, Inc.	Chemical Manufacturing	19.37	-56.18%	337.5M	36.55%
JRCC James River Coal Company	Coal	15.9	-6.36%	435.7M	36.15%
NVEC NVE Corporation	Electronic Instr. & Controls	30.99	10.17%	144.6M	35.80%
WIRE Encore Wire Corporation	Misc. Fabricated Products	20.77	20.97%	478.4M	33.15%

In William O'Neil's book "How to Make Money Selling Stocks Short", he listed 6 rules for selling short in the Bear Market. Follow these and it should help your success rate:

1) Short sell only in the early period of Bear Market. Short selling in late period is dangerous as market can reverse suddenly. Short selling in the Bull Market does not offer high probability of success.
2) Stocks should be relatively liquid with an average daily traded volume of 1 million or more shares. If you short illiquid stocks, you might get short squeezed when the market reverse suddenly.
3) Stocks which are market leaders in Bull Market are potentially good candidates.
4) Stocks with Head and Shoulder chart patterns or where 50dma cuts below 200dma are good candidates.
5) Take profits often, target 20%-30%.
6) Cut losses quick, cover stops at 4% above short price.

Disclaimer: The author owns no positions in the securities mentioned in this article