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.
Evoqua Water Technologies
This provider of water and wastewater treatment systems has sprung a leak and is making its way to lower ground. Evoqua shows a bearish channel with poor relative strength and a bearish signal on the Moving Average Convergence Divergence (MACD).
Money flow is declining, telling us big institutional holders are selling. The 200-day moving average is not far away from here, and another leg lower will give that target a test.
If short, put in a stop at $30 and ride to the $21 area.
National Western Life
This life insurer has been under substantial pressure lately. The sellers have really gotten the upper hand here, with strong volume and a MACD sell signal. The cloud just turned red, so more fuel for the bears. The Relative Strength Index (RSI) is in a steep slope downward -- not a good sign, especially with markets near all-time highs.
Support might be just below at $170 or so, but that may not hold here. Put in a stop at $200, ride it down to $160 or so.
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.