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.
Luminex
Luminex Corp. (LMNX) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The chart of this maker of biological testing technology is just awful and continues to go down the drain. It's hard to find any stocks back at the March lows, but here is one.
The recent selling pressure has been intense, but that is no reason for the sellers to let up. The trend is the trend, and it is down. The Relative Strength Index (RSI) is poor and money flow is quite bearish.
If short, use a generous stop at $25 or so and ride this into the teens. This is a very bearish chart.
iRobot
iRobot Corp. (IRBT) is rated a Buy with a B- rating by TheStreet's Quant Ratings.
There was some horrible stock action last week for this maker of consumer robots, with a big reversal and a nasty volume candle on Wednesday. Moving Average Convergence Divergence (MACD) is about to roll over and the RSI fell sharply from above.
While a follow-through day down would be ideal, this is an aggressive short and could be held to fill the gap in April around $45. The selling last week was big and intense. Support first is up at $67 or so, but keep that short on with a stop at $89.
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.
