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 producer of document management systems has fallen hard but may have found some support at the 100-day moving average. Money flow is poor and Moving Average Convergence Divergence (MACD) is on a double sell signal.
Volume is starting to rise on the days this stock has been lower, a sign of institutional selling. There is quite a ways down to support at the 200-day moving average, coming in around $20.80 or so. Some selling on higher volume would cinch that target, but put in a stop at $27 just in case.
NextEra Energy Partners
The manager of clean energy projects had a nice run early in 2021 but has been choking ever since the first few weeks ended. With lower highs and lower lows the bearish pattern has been established. Money flow is good; however, the other indicators are reflecting more downside to come.
The Relative Strength Index (RSI) is poor and the cloud is red and widening, a bearish characteristic. The 200-day moving average is not far off and that is likely where NextEra will bounce.
If short, put in a stop at $78 and ride this stock to $68.
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.