Saturday, May 18, 2013

WIN, May 19 2013

Windstream Corporation (WIN) NasdaqGS

WIN shows a decided bias to the downside on the monthly chart. It looks very much like a falling knife.

The weekly WIN chart shows an accelerating downtrend. Clearly, it is a race to the bottom with this stock, with no relief at any point so far.

The daily chart shows a descending triangle. This is a downtrend continuation pattern. If all holds to form, eventually the support will break, and WIN will see new lows.

The likeliest bottom is the May 2010 low of 6.02. Everybody sees that flashing like a beacon on the chart, which means it may never actually get there - and it if does, it either will be there only for a moment, or it won't hold.

All that said, it is clear why WIN is one of the most shorted stocks. However, is shorting WIN a good idea? It pays a huge dividend, which hasn't protected it, but that dividend inflicts huge pain on any shorts holding it when it goes ex-dividend. You likely will see a price jump around that date, followed by an even quicker slide back down. If you do short, circle that date on your calendar.

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