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.
Biogen
Biogen Inc. (BIIB) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
Talk about a reversal of fortune! This big biotech recently jumped higher on good headlines, then crashed hard two days later on some devastating drug news. That's enough for players to give up on the name, and that means more downside is likely coming.
Moving average convergence divergence (MACD) is on a sell signal while the cloud has turned red once again. Volume trends are poor except for the one-day shot higher, but the bulls will likely feel the wrath of pain now.
Short here with a stop at $260; look for a move to $200 or so.
Exelixis
Exelixis Corp. (EXEL) recently was downgraded to Hold with a C rating by TheStreet's Quant Ratings.
The oncology-focused biotech company is not excellent at all. This stock is bending lower on accelerating volume, with no end in sight. The Relative Strength Index (RSI) is steep and sloping down, and there is likely more negative price action to come.
Money flow is very poor, and while there could be a minor pop toward the 200-day moving average it's likely to be weak. The cloud is red; this chart is quite bearish.
If short, put in a stop at $22 but look to ride this into the mid-teens.
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.
