Why The RealLifeTrading.com CEO Is Considering A Short Position In NetApp

Jerremy Newsome was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Newsome, the CEO of RealLifeTrading.com, discussed trading strategies on NetApp Inc. (NASDAQ: NTAP) following its earnings report in which the company's earnings per share and revenue fell short of expectations.

"The fact that [NetApp] broke $33 [per share] on the daily chart, I'll be looking to short this at some point," Newsome said. "Very similar to Lumber Liquidators it is a strong gap, it is ‘sloshed,' its down far. That $31 level is $4 and over 10 percent."

Newsome said he will wait before shorting before further conviction can be made that "there is really not much stopping NetApp's downside to at least $29. On a daily chart, there is nothing."

Newsome said he has a trading strategy that is appropriate for shorting shares that have already seen noticeable downside. He said that he would enter a short trade position up to two separate times, and if neither trade proves to be profitable he won't touch the stock the rest of the day.

"If I lost on NetApp the first try, I have one more shot," he said. The pro added that it is important "not to get emotional" because traders that are emotional "lose money every time."

"No revenge trades. I just move on."