DISCLOSURE: Readers should assume that all stocks mentioned in this column are owned by the author and/or his firm unless otherwise noted.

As CPAs and other regular readers of this column or my newsletter will confirm, using company insider data to your advantage isn’t just an investing approach for bull markets. Seven of the 10 positions I’ve added since the end of December have been short positions. Six of those shorts have been profitable. Two of them — Google (NASDAQ: GOOG) and Under Armor (NYSE: UA) worked out so well that I’ve already covered them for substantial gains.

Granted, we’re still down 3.9 percent year-to-date, but the drag on my Recommended List has come from my still large portfolio of longer-held long positions. But considering that the S&P 500 and Russell 2000 Indexes are off 10.0 percent and 9.4 percent, respectively, over that same time, I can’t complain.

Nor can I be satisfied. After all, I’m still in the red. To combat that fact, I’m adding yet more short positions. While it’s unclear if this noticeable down channel for the indices has weeks or months to play out, betting on more downside in the near-term still appears the higher odds play in my opinion.

I’ve recently added the following three shorts: Metabolix (NASDAQ: MBLX), LoopNet (NASDAQ: LOOP) and Molex (NASDAQ: MOLX). All three of these stocks share the confluence of a negative insider profile and a technically weak stock.

The common wisdom about using insider selling data to garner investment intelligence is that it is much more difficult to use since insiders have so many legitimate reasons to sell. As trite as that insight seems, it is true. Diversifying assets, buying a house, paying for tuition … these are all reasonable excuses, amongst others, for executives to sell their shares.

The excuse starts to ring false, however, when insiders continue to sell after their stock has crumbled in value. Selling any asset after it has lost most of its value just doesn’t relay much optimism that it is likely to rebound in the near future.

So, as much as we hope that Metabolix’s technology for organic plastics works out commercially, the fact that four insiders continue to diversify their holdings after MBLX’s 40 percent decline in the past three months leads me to believe that any grand success remains quarters away.

LoopNet has sellers even though its shares have fallen just as severely since last fall. Molex’s stock may only be down 17 percent in the past six weeks, but its latest leg down is a continuation of a downtrend that began in late 2006. Insiders have sold the whole way down. And talk about diversification. Molex Chairman, Frederick Krehbiel, has deemed it logical to nearly halve his direct holdings since last October.

Of course, if valuations of these three stocks were dirt cheap, and prospects of a turnaround imminent, I would merely avoid them instead of shorting them. But that is not the case. Metabolix isn’t expected to be profitable for at least two more years, and is in the process of diluting shareholders with another round of equity financing.

LoopNet runs an online marketplace for commercial real estate. Low costs may keep the firm profitable, but management just lowered guidance for this year. I’d be surprised if it is the last time they will be forced to do so considering the market they serve.

Molex, a manufacturer of electronic components, just released a disappointing quarter. The commodity nature of many of its wares combined with rising raw materials costs make another disappointment likely if consumer demand weakens as many expect.

If my assumptions behind these shorts are incorrect, I would expect the many long positions on my Recommended List to rise more. So though I expect to make money with them, at the very least they act as a prudent hedge in a market that I still do not feel bullish about. You might want to consider some of the techniques above as you work with your savvier clients in this hard to read investment client.

Jonathan Moreland is the Director of Research at New York-based Insider Insights.com.
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