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.
Semiconductor stocks have been taking it on the chin lately. This one has a wide range here and is threatening a major breakdown.
Even as the entire group has weakened some stocks remain buoyant. Microchip does not, and this stock is clinging to the 100-day moving average but is ready to fall toward the 200-day moving average at around $120. That's a lot of air underneath, supported by a downward-sloping Relative Strength Index (RSI) and a sell signal on the moving average convergence divergence (MACD).
If short, put in a stop at $150 and ride to $120. Good risk/reward.
The provider of cloud security and risk management services sports a defined downtrend channel; this stock has downside room to the mid-to high $30s. MACD is on a double sell signal and the cloud is a monstrous red; the trend is clearly down.
This could take a while to get to the goal, but a move to the November lows around $37 is a good target.
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.