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 provider of domain name registry services is one of those old, stodgy names from the dot.com era. The stock recently has shown a sideways path within a very wide range.
It's confined to the box here, and with a bearish signal on the moving average convergence divergence (MACD) there is reason to believe this trend may continue downward and break the box. We're getting ahead, but this name shows awful relative strength and the cloud just turned red.
If short, put in a stop at $202 and ride it down to the $170s.
American Public Education
With a nasty head-and-shoulders pattern here and the neckline about to break, the stock of this provider of online education services is weak heading lower. Money flow is bearish and increasing, signs of institutional distribution.
The Relative Strength Index (RSI) is compelling, bending sharply lower as. The volume swells. Those are major red flags. The cloud just turned red, and there is some support in the mid $20s. MACD has rolled over, too.
there is just nothing positive about this chart. If short, ride it to the low $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.