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.
SolarEdge Technologies
SolarEdge Technologies Inc. (SEDG) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
This developer of inverter systems for solar photovoltaic installations really powered up late last year but is falling on hard times. The top made in early January is failing and now a series of lower highs and lower lows is in place. That has turned the cloud red, and moving average convergence divergence (MACD) is bearish as well.
The 200-day moving average seems like the next area to test, a good 80 points lower. It will take some time, though, so be patient if you're short and want to stick with it.
Put in a stop at $330 and ride it to the 200-day moving average around $235.
CoStar Group
CoStar Group Inc. (CSGP) recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.
The range for the provider of analytics to the commercial real estate industry is well-defined, but last Wednesday saw this stock fall out of the box. That's bearish here, and the cloud turning red is also bad news.
MACD is on a sell amid very strong bearish turnover that has this one pointing lower. Even as relative strength is pretty well oversold, that's not reason to get long; indeed, it's reason to be even more bearish.
Put a stop in at $905 and ride this down to the September support around $780.
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.
