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 week 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.
GW Pharmaceuticals
GW Pharmaceuticals PLC (GWPH) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
The developer of cannabis-derived pharmaceutical products has fallen hard of late, with strong turnover and bearish money flows. Moving average convergence divergence (MACD) has also rolled over while the Relative Strength Index (RSI) is quite poor.
When the market is making new highs and stocks in strong sectors are acting this poorly, there is no doubt more downside is coming. If short, put in a stop at $112 (the 200-day moving average) and ride it down to the low $90s.
Tootsie Roll Industries
Tootsie Roll Industries Inc. (TR) recently was downgraded to Hold with a C rating by TheStreet's Quant Ratings.
Tootsie Roll is an iconic brand, but the chart shows the stock is in quite a bit of trouble. Money flow is poor and the volume trends are bearish. The arching resistance line shows there is not much oomph to get the stock moving higher; the cloud is red and MACD is about to roll over to a sell signal.
If short, put in a stop around $34 and ride to down toward the mid-$20s.
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.
