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.
This high-flying maker of battery-electric vehicles and aircraft is really volatile, with giant percentage moves up and down. The recent rally takes this stock to the 200-day moving average and some rejection; there is some gap support around the $11 level.
The Relative Strength Index (RSI) shows overbought into resistance while money flow is quite bearish. Volume trends seem to portray some short covering here, but that'll end soon enough.
A good short here back down to the $10 area, which is pretty aggressive. Put in a stop at $25.
The maker of products for good and animal safety shows a series of lower highs and some support around the $45 area. But the indicators are showing bearish flavor here, with money flow distinctly poor and moving average convergence divergence (MACD) on a bear signal since April.
RSI cannot seem to get over 50; the 200-day moving average seems a good target. If short, put in a stop at $48 and ride this down to $41.
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.
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-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.