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.
Stitch Fix is a newer name that has been rattled. The stock of the online apparel retailer fell sharply in December but rallied strong, which included some powerful earnings. However, we see a massive shooting star and a bearish head-and-shoulders pattern, ominous and looking for more downside.
Relative strength is breaking down, and with a close below the lower Bollinger band this stock is headed down to Chinatown. This is a good short to the high teens.
Biotechs have been challenged for most of 2019, with some heading toward their December lows. Count BioMarin as one of them.
The stock chart looks abysmal, especially after breaking the range below the $87 level. Higher volume recently on the sell days is a good clue that big money is exiting the name. Moving average convergence divergence (MACD) is on a sell signal, too.
We could see that December low around $79 broken very soon; it's a short, and add more with a rally up.
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.