These recently downgraded 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.
Hyatt is one of the premiere hotel brands out there but there are no fans among stock buyers. Indeed, the recent failure at the 20-day moving average has this one in big trouble.
Moving average convergence divergence (MACD) is about to roll over to a sell signal while the Relative Strength Index (RSI) is bending lower; it’s another stock that is making lows when the market is making new highs. Higher turnover on the down sessions tips us off here.
Look for a move to the mid-$50s but put in a stop at $74.
The maker of test and measurement equipment shows a defined channel of lower highs and lower lows on the chart. Money flow is weak and the Relative Strength Index (RSI) just broke down hard as the stock rejected the 200-day moving average on several occasions.
Support may be here just under $5 but this stock has more downside to come. Put in a stop at $5.75 and look to ride it down to $2.50 or so.
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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