Market Overview

Investment Pro: Tips On Short Selling, One Stock To Buy On Strength

Investment Pro: Tips On Short Selling, One Stock To Buy On Strength

Adam Sarhan is a monthly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.

Sarhan Capital is a privately owned investment and advisory firm that offers a suite of services for both individual and institutional investors.

As a frequent guest to Benzinga's #PreMarket Prep, Sarhan Capital's founder and CEO discusses his top picks in the market. On Wednesday's show, the investment pro argued that Buffalo Wild Wings (NASDAQ: BWLD) is looking attractive.

Why B-Dubs?

Sarhan pointed out the stock's large breakout following its earnings report only to "sit quietly." In addition, he noted the stock "looks great," especially following last week's mass sell-off.

As such, investors should isolate stocks "showing strength" and invest in "leaders."

Sarhan also noted the stock isn't terribly far removed from its all-time high of $199.79.

Related Link: Why Credit Suisse Is Still Bearish On B-Dubs

Short-Selling Setups

Sarhan also discussed favorable short-selling setups. As a general guide, he noted that the current market environment may not be that favorable. He is looking for the market to break below last week's high to indicate a short-selling opportunity may be justified. If the market were to break above last week's high, a short-selling opportunity may not be fully justified.

Since the market is trading in between the ranges, the market may be stuck in "no man's land," with no clear indication of how to proceed.

However, Sarhan continued that he believes the 2,040 mark on the S&P 500 index separates bear from bull territory. Since the index remains below the mark, he suggests shorting stocks showing "strength."

"Just like in uptrends, you want to buy the dips. In down markets you want to sell strength, not just weakness," Sarhan concluded.

Image Credit: Public Domain


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