Each week Trifecta Stocks identifies names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet's Quant Ratings, we zero in on five names.
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 online retailer has become a play on crypto or bitcoin, but buyers are not showing up to support this stock like they do the currency. With a channel that shows a series of lower highs and lower lows we could see Overstock make a run down to the 200-day moving average. Below there is some support at the $40 level, which might be tested on the next run lower.
Volume trends have been bearish since September, and that doesn't look to change much soon. If short, put in a stop at $75 and ride this down to the $40s.
This provider of online tutoring services in China fell hard in October and has yet to recover. Resistance is above with the 100- and 200-day moving averages; any rallies will be capped right there. The cloud is red and is pointing toward lower prices ahead. The Relative Strength Index (RSI) is flat.
One thing that stands out in a market making new highs is a stock that is not performing well, and GSX sticks out like a sore thumb. There is some support at the $50 level, so look for that as a target, around 20% lower than current prices. Put in a stop at $70 just in case.
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.