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.
Royal Gold Inc. (RGLD) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
Maybe inflation is coming back, but you wouldn't know it from the precious metals. Gold has been up and down, and the gold miners show the weakness.
Royal Gold, which acquires and manages precious metal streams, has a series of lower highs and lower lows, with volume picking up recently to the downside. Some of the indicators seem to be bottoming out, but don't take that seriously -- it has been happening often and faking out the bullish traders.
If short, put in a stop at $115 and ride this down to $100 or lower.
Aramark (ARMK) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
With a couple rough days here, this food service and uniform company has a date with some lower levels. Aramark shows potential for taking the 100-day and then the 200- day moving average in short order.
Heavy turnover on the downside is a hallmark of big institutional selling. The Relative Strength Index (RSI) appears to be headed downward and the cloud is about to cross bearish.
There is some good downside for the patient short down to the 200-day moving average, around $29. Put a stop in at $40.
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.