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.
General Dynamics
General Dynamics Corp. (GD) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
There's been no defense for this defense and aerospace giant as General Dynamics has fallen over the past month. Indeed, the bullish setup was there until a peak at the 200-day moving average in June, and then the selling commenced.
Money flow is bearish and moving average convergence divergence (MACD) is on a sell signal. The cloud is about to twist bearish and some support lies around $130, a good 12% lower. Target that area but put in a stop at $155.
Equity Residential
Equity Residential (EQR) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
With low interest rates one would think real estate investment trusts would be a good bargain with high yields, but that isn't the case here. This name has trouble written all over it, and even the March lows are in play.
With some heavy selling over the last month, EQR could be ready to break that strong support at $56. Below that level is the aforementioned March lows around $50. If short, target that area but put in a stop at $61.
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.
