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.
Etsy Inc. (ETSY) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The stock of this online marketplace has been brutally punished lately, with lower highs and lower lows. The stock has fallen more than 60% from its peak, with heavy selling and poor money flow.
The Relative Strength Index (RSI) is oversold, but that isn't a reason to buy. If anything, the top of the channel is a good low-risk entry for a short.
Target the $110 level, put in a stop at $165.
CorVel Corp. (CRVL) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The provider of medical cost containment and managed care services has had a spectacular collapse in just a few weeks. It seems the end of 2021 was the peak here, with bearish money flow and a bear signal on the moving average convergence divergence (MACD).
RSI slopes downward, which means more underperformance versus the market. Indeed, the recent rally is a good spot to enter a short. The stock was rejected at the 200-day moving average.
Put in a stop at $170, target the July lows around $135.
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.