Let's assume that I am expecting a dip in a stock that I own. In such cases the usual strategy is to sell stock and buy back at a later date during the dip. However, this would trigger a taxable event and
- reset my entry date that would have helped me to qualify for long term capital gains; AND
- I would deleverage my position by paying taxes to IRS early (i.e. if I wanted to reenter later at the same price then I would be able to buy less shares compared to when I did not sell anything)
Instead, could I simply short the stock while still maintaining my long position and cover the short on the dip? This seems like a better strategy unless I am missing some tax rules?