These names are displaying both quantitative and technical deterioration.
Stocks quotes in this article:
Each week Trifecta Stocks identifies names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet’s Quant Ratings, we zero in on five names.
While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
Retail has been a challenge of late and this apparel maker is a good example of the selling that has hit this group. The recent volume has been strong, and take a look at the nosedive in money flow — very bearish.
The 100-day moving average may be a bit of support here, but a break and this stock is a goner. We could see at least a run to the 200-day moving average ($94) or even a bit lower, to the mid $80s.
Target a level around $84 but put in a stop at $106.
This stock of this online destination for automobile consumers in China has been pounded lately on strong volume, and while the stock has shown poor relative strength that doesn’t seem to be ending anytime soon. Money flow is awful, and while the Relative Strength Index (RSI) is oversold that is not a buy signal.
Moving Average Convergence Divergence (MACD) has rolled over for a fresh new sell signal. The cloud is red. Is there anything positive on this chart? Not that we can see.
Ride it down to the low $60s at least, but put in a stop at $89.
This commentary is an excerpt from “5 Bearish Bets” a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.
Want to find out the other stocks we think look good short this week and how to play them? Click here for a trial subscription to Trifecta Stocks and get “Bearish Bets” each week!
— Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.
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