Short Setup
Sell weakness — the disciplined bearish playbook
The stack
3 screeners stacked together
Why this stack works
Shorting on Indian equities is harder than going long — the underlying market drift is positive over time, and stocks fall faster than they rise but bounce harder. Successful shorts require strong multi-timeframe bearish alignment, not just one bearish indicator. This stack demands the higher-timeframe trend (200 EMA) AND a fresh trigger (bearish crossover) AND momentum confirmation (MACD).
Entry rules
- 1Wait for the bearish MACD crossover on the daily close.
- 2Confirm price is below the 200 EMA AND the recent 50 EMA crossover is below the 200 EMA.
- 3Enter short on the next candle's open, or on a small bounce.
Stop-loss
Above the most recent swing high, or above the 50 EMA — whichever is closer.
Target
Next major support level on the daily. Book half; trail the rest tighter than you would on longs (shorts reverse fast).
When this fails
- Index is in a strong uptrend (broader bid lifts even bearish-looking stocks).
- Stock is within 7 days of earnings — surprise positive results can spike shorts violently.
- Stock is in a low-liquidity name — shorts get squeezed on illiquid names.
FAQs
Three reasons: (1) the long-term drift of equities is positive, so time is against you; (2) shorts have unlimited downside (stocks can run 50%+ on takeover news, squeezing you); (3) margin requirements are higher and you pay borrow costs.