Short overextended stocks in a declining market

It is my belief that it is easier to make short-term gains via shorting than taking a long position. My reasoning is that stocks never go straight up. That there are always stages where a stock succumbs to profit taking on its climb upwards and will make short term declines. I look for a stock that meets the following criteria:

• stock is in overall upward trend (over last 4 months)
• stock has risen >100% last 4 weeks
• stock has risen >50% last 2 days -current volume is higher than usual
• RSI >80

Once I have found a stock that meets the above I will watch it closely for the top. The top is usually on or within a day of the highest recent volume. I will short the stock the first afternoon that I see it will not close within 5% of its intraday high (most likely the top) or the first down day after a series of 4 or more up days. In just about every case you can anticipate the top as you watch the upwards momentum slow down and reach resistance as the short-term traders say to themselves "I've made enough money on this play and I'm bailing out". This creates the snowball effect triggering profittaking and some stop-losses.

Usually this downwards momentum lasts for only 2-3 days before levelling off and the stock goes into a cosolidation phase. I choose to cover my short once the stock gives back 30% of its gains over the previous 5 days or once the downwards momentum has subsided whichever comes first. Just a couple of final notes:

• stock involved in takeovers do not qualify
• stocks trading less than 300000 shares on the high days don't qualify
• I place a stop-buy at 10% above my short price
• I use pcquote to watch the show irby this is a great thread and I value your opinion on this trading method.