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 and may present interesting investing opportunities on the short side.
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.
Guidewire Software
Guidewire Software Inc. (GWRE) is rated a Hold with a C rating by TheStreet's Quant Ratings.
High-flying tech names do actually come down sometimes. This provider of software for property and casualty insurers had a rough week -- sharply lower for two straight days and down she goes?
Guidewire is a big mover and when it's hot it can really go. But the technicals are not great now, with bearish money flow and the shares breaking under key moving averages. Moving average convergence divergence (MACD) is about to cross bearish for the first time in a month. The cloud is red, too.
If short, look to ride down to the low $90s but put in a stop at $110.
Revance Therapeutics
Revance Therapeutics Inc. (RVNC) is rated a Sell with a D rating by TheStreet's Quant Ratings.
This biotech company has been butchered of late, showing lower highs and crossing over short-term moving averages like a hot knife through butter. MACD is solidly on a sell signal, and money flow is bearish, too. Look at the Relative Strength Index (RSI); a turn down once again here at the 20-day moving average. That is significant.
Volume bars of late have been strong, and that was the case last Wednesday with the poor close. If short, use a stop at $28 but look to take this stock down to the $22 level (200-day moving average) first, then lower.
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.
