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.
The operator of a digitized brokerage and wealth management platform has been a hot name to the upside, but the last few months have shown the stock to be more sideways. Money flow is bullish but moving average convergence divergence (MACD) and the Relative Strength Index (RSI) are rolling over here, while volume trends are slowing down.
There are mixed signals on the indicators, but the price action tells us a move to the 200-day moving average could be on the way. That level is at $90, a substantial move downward from here. First things first, though: A break of the box would set up that move eventually.
If short, use a stop at $175 and ride it lower to $100 and then beyond.
Moderna became a household name for its COVID-19 vaccine and this upstart really made a great move, with the uptrend channel still in place. However, a pullback to the lower end of the channel might be on deck, as we've seen in December and March. MACD looks to be rolling over.
We don't expect to see a huge breakdown based on the chart/technicals as the indicators are pretty decent, but a roll down to $140 would not be surprising. Look for that target but use a stop at $235 just in case.
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.