Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, Trifecta Stocks identifies five names each week that look bearish.
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.
Enphase Energy
Enphase Energy Inc. (ENPH) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
This provider of energy management systems was hot stuff after the crash's bottom in late March, but since then has fizzled out. While there are some decent support zones, this stock has started a slide on higher volume -- not a good sign.
Money flow is negative and the moving average convergence divergence (MACD) is on a sell signal. The channel is defined and might break to the downside, thus a move to the mid-$30s is possible. There was big volume recently on that sell day, so if short put in a stop at $50 but target the low $30s.
L Brands
L Brands Inc. (LB) recently was downgraded to Sell with a D rating by TheStreet's Quant Ratings.
Here's another retailer that has fallen on hard times. The company behind Victoria's Secret and Bath & Body Works is headed back down and may get to the March lows.
There is good support at $10, but that is a good 30% lower than current prices. MACD is on a sell signal and money flow just turned bearish; the Relative Strength Index (RSI) slope is down and steep.
If short, put in a stop at $18 but ride it down.
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.
