Trifecta Stocks is a long-only model portfolio, but we are anxious to give our subscribers insight into stocks that may pose interesting investing opportunities on the short side.
Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, we will identify five names each Friday that look bearish. 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.
Real estate investment trusts (REITs) and real estate trusts are struggling, with bonds and higher interest rates becoming a competitive alternative. Hence, these stocks have been coming off hard and on strong turnover. Kilroy has poor momentum and the Relative Strength Index (RSI) slope is steep. Further, the September low was breached this week. Sell any rally.
Retail has put up a mixed performance since the end of the holidays, and the picks and pans have been quite evident, save for Amazon (AMZN:Nasdaq). Ralph Lauren was on quite a roll through the holidays but has now faltered post earnings. The high volume selling comes along with a Moving Average Convergence Divergence (MACD) sell signal, and a recent test of the 50-day moving average is likely to fail. Any break of $104 is a good short.
Technology names have had their troubles over the last several days. Citrix hit some new highs lately but now has backed off on very high turnover. Institutions are selling this name here, and we could see the 200-day moving average coming into play. Hence, a good short right here is down to the $83 level. MACD is on a sell signal.
This retail high-flyer has fallen on hard times lately after a whopper of a gap down on massive volume. Sellers have been active here and while Acuity attempted to make a run at filling the gap it failed miserably. Double MACD sell signals here, so any rally up to the $150s area could be sold.
I love Hawaii, but I really don't like the chart of Maui Land & Pineapple. The stock has been pounded in 2018 and beaten with a stick. The MACD sell signal is still on since January as momentum indicators are well oversold. Any rally back to the moving averages around $13-14 could be sold.
This commentary was originally sent to subscribers of Trifecta Stocks on Feb. 9. Click here to learn more about this portfolio, trading ideas and market commentary product.
-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.