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 stock of this supplier of semiconductor test and inspection equipment has fallen sharply since peaking in early April. Lower highs and lower lows spell trouble, and while COHU recently bounced off the 200-day moving average we think this is a great time to look for lower prices ahead.
Money flow is poor and the Relative Strength Index (RSI) could not get above the 50 level when it started to rally, a telling sign that big money does not want to get involved. The cloud is red and is good resistance.
If short, ride this down to the high $20s and put in a stop at $40.
The stock of this Chinese social media platform is coming off a sugar high from earlier this year and is now crashing hard with very heavy distribution. YY shows a defined channel of lower highs and lower lows, the cloud is red and the money flow is decisively bullish.
Nothing here indicates it is time to buy this stock, nor do we see any relief coming. This stock has plenty of room to run lower; just ride the trend.
Maybe target the low $50s, but put in a stop at $80 (aggressive).
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.