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.
Standard Motor Products
The maker of automotive replacement parts has had a rough go of it recently, with a massive drop in mid-December on very high turnover. There also was follow through, as we saw big institutions selling shares hand over fist.
The cloud is red and portraying more downside to come. The recent bear flag is tempting to buy, but there is a good trap set for the bottom-fishing bulls. The 200-day moving average is good resistance here as well.
This stock is likely headed to the July lows in the high $30s, and possibly much lower.
Fidelity National Information Services
The financial services technology company is in trouble with the recent waterfall drop in this stock. Moving Average Convergence Divergence (MACD) is crossed for a bearish signal while money flow is atrocious. The Relative Strength Index (RSI) is steep and showing a downward curve -- all too bearish.
Recent buys on the stock were on weak turnover, and with markets making new highs we should see stocks such as Fidelity performing well, not like this. Ride this one to the low $120s but put in a stop at $140.
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.