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 developer of medicines for treating intractable diseases is a repeat offender, as the stock has been on our list a few times before. This time around the money flow is weak and the slope of the Relative Strength Index (RSI) is quite steep, indicating very poor performance.
Moving Average Convergence Divergence (MACD) is on a double sell signal, and volume has accelerated in the recent selloff. While the line in the sand is the support drawn, the sellers have been quite busy here and it seems more is in store.
Target the $26 level (the April low) but put in a stop at $40.
The chart of the maker of Sleep Number beds might put you to sleep if you're not paying attention. The stock recently showed a big slide in money flow, the Moving Average Convergence Divergence (MACD) has turned negative and the Relative Strength Index (RSI) is breaking down. However, the price action has not yet caught up to the indicators, though we should see that happen here soon.
Once the $43 level is cracked on the downside for a close and confirmation this really could get moving downward. If short, target the low $30s but put in a stop at $48.
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.