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 developer of intuitive human interface solutions has a series of lower highs on the chart and looks about to break down. With poor money flow and weak moving average convergence divergence (MACD) there is room for downside.
Recent volume trends have been bearish. The stock has landed for now on the 100-day moving average, but if that fails the 200-day moving average is the next target, around the $71 area.
That leaves a nice 10% move downward, but put in a stop at $82.
The footwear designer and distributor has tried to break the downtrend, but with such selling and weak money flow there is not much good in the chart to get bullish. The recent pop to the 100-day moving average was on moderate volume, but the 200-day moving average still looms as resistance.
The cloud is red, and with some support in the $15 area we could see a move down there from current prices, a nice percentage drop. Put in a stop at $19 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.
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.