Nevertheless, short bursts of buying will inevitably cause the stochastic lines to make their way to the upper reference line. These are near-perfect shorting opportunities, because often, once a stock goes into a severe downtrend it never seems to recover.

For TDDDF, the first decent shorting opportunity occurs all the way on the left-hand side of the stochastic graph in early April when a spurt causes the lines to cross into overbought. Once the lines leave the overbought region, they fall very hard and very fast and bury themselves beneath the lower reference line in oversold territory for most of the next two months. Only in early May do the lines try to escape the clutches of oversold, only to be sucked back in. The stock gets chopped from 25 all the way down to 5.