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.
Cass Information Systems
The provider of payment and information processing services has been bouncing around, but this latest pop has not been all that impressive. A series of lower highs has Cass in trouble, and there is plenty of room to fall into the mid-$30s.
Money flow is weak while the cloud remains red even though the stock rallied a bit this week. Not good, as volume trends are bearish.
If short, target the $36 area, put in a stop at $43.
High-beta names are getting crushed of late, but this provider of cloud communication platforms has been beaten up for months. Since a minor peak in October it has been a series of lower highs and lower lows for Twilio along the way to the recent distribution.
There is little to like from a bullish view, as Moving Average Convergence Divergence (MACD) is on a sell signal, the cloud is red and money flow is bearish.
What else do you need? A target, and we see $200 as a good level to short, but put in a stop at $270.
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.