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.
Illumina
Illumina Inc. (ILMN) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
This provider of genetic analysis tools has been roughed up lately. A big gap lower on an earnings miss showed the big money has fled the scene. Notice the big bar last week; huge volume on the downside. That spells trouble, especially with no price action reversals.
First up is the 200-day moving average at $320 and then the gap to fill around $300.
If you are short here keep a stop at $365.
Yelp
Yelp Inc. (YELP) recently was downgraded to Sell with a D+ rating by TheStreet's Quant Ratings.
The operator of local business review websites is hurting badly after a poor earnings report. The stock fell hard on massive turnover, and the sellers were quite busy on Aug. 7. The cloud is turning red and money flow is negative. Moving average convergence divergence (MACD) has turned to a confirmed sell signal, too.
There is some support here just under $19 but plenty of room to go lower. If short, put in a stop at $25.
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.
