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 pharmaceutical company has been in a world of hurt for some time, and the stock just can't seem to get some energy working. That money flow is decisively negative, the Relative Strength Index (RSI) has just rolled over and there is little sign of institutional buying.
The Moving Average Convergence Divergence (MACD) is about to roll over; there is nothing good on this chart for the bulls. But the bears have a good case, so if short target the high teens but put in a stop at $30.
Nothing is worse than another company stealing away your key players. That's what happened to VMware the other day, with Intel (INTC) tapping Bob Gelsinger, VMW's chief executive, as its new CEO. But the bearish story of VMW has been happening for weeks, so the recent breakdown should be no surprise.
Lower highs and lower lows on the RSI along with lower highs on the price chart tell us more pain is to come. The stock is now below the 200-day moving average; nothing good happens there. If short, put in a stop at $140.
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.