Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, Trifecta Stocks identifies 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.
CalAmp has been pulverized this month as we see the double top firmly in place. The big selling that hit Oct. 1 has just led to more distribution. The downtrend line is also in place.
Note the big volume that hit on the last day of September, where the Moving Average Convergence Divergence (MACD) also turned to a bearish signal. The Relative Strength Index (RSI) is poor and the momentum indicators are pointing down.
Any rally could be a good short.
Synaptics has fallen off a cliff this month on heavy turnover. The break of the 200-day moving average was the death knell for this name. Wednesday saw the stock slice through the recent lows, not a good situation. RSI is very weak and momentum indicators are bearish.
SYNA could see a pull up in price but that would be a good opportunity to sell. The 200 DMA is a good 25% higher, which would turn this bullish. That is very far off, however, as shorting seems to be working.
Dycom has created an upside-down bowl, which is quite bearish. The stock closed Wednesday on the dead lows, right at the August lows on higher volume selling. The downtrend line is in place, so we may see that come into play if the stock rallies, but a break here below $67 probably leads to lower prices ahead. MACD is on a sell signal, while RSI is poor but oversold.
DY may rally but that would be a good short chance.
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.
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-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.